Goldman Sachs has significantly increased its near-term European natural gas price forecasts, driven by a slower-than-anticipated recovery in Persian Gulf liquefied natural gas (LNG) exports. The revised outlook reflects persistent geopolitical tensions disrupting critical shipping lanes through the Strait of Hormuz, tightening global supply and pushing benchmark TTF prices higher.
This development underscores Europe's enduring vulnerability to external supply shocks, particularly as the continent relies heavily on LNG following the reduction of Russian pipeline gas. The elevated price trajectory and reduced storage projections signal potential energy security challenges and inflationary pressures heading into the crucial winter heating season.
Executive Summary
Goldman Sachs analyst Samantha Dart has revised up Dutch TTF gas price forecasts for the third and fourth quarters of 2026 to €60 and €53 per megawatt-hour (MWh) respectively, a substantial increase from previous estimates of €41 and €40. This adjustment stems from an expectation that Persian Gulf LNG exports will not normalize until October, delayed from an earlier July projection. The ongoing disruption through the Strait of Hormuz is projected to leave Northwest European gas storage at approximately 67% full by the end of October, down from a prior estimate of 74%, and only 28% by late March 2027.
What Happened
Renewed US-Iran hostilities and broader Middle East tensions have led to sustained disruptions in shipping through the Strait of Hormuz, a vital chokepoint for global energy trade. This geopolitical friction has curtailed LNG flows from the Gulf, prompting Goldman Sachs to push back its timeline for the normalization of Persian Gulf LNG exports from July to October 2026, directly impacting European supply expectations.
Key Developments
- TTF Price Surge: Goldman Sachs raised Q3 and Q4 2026 Dutch TTF gas price forecasts to €60/MWh and €53/MWh, respectively, up from €41/MWh and €40/MWh previously.
- Hormuz Disruption: Persistent Middle East tensions are delaying the normalization of Persian Gulf LNG exports via the Strait of Hormuz until October, impacting global supply.
- Storage Deficit: Northwest European gas storage is now projected to reach only 67% by end-October, down from 74%, and 28% by end-March 2027, increasing winter supply risks.
Regional Context
Europe's post-2022 energy strategy has pivoted heavily towards diversified LNG imports to replace Russian pipeline gas, making the continent acutely sensitive to disruptions in global maritime chokepoints like the Strait of Hormuz. This reliance amplifies the impact of Middle East instability on European energy security and pricing.
Market Impact
Traders and analysts are now recalibrating their positions, with Goldman Sachs suggesting TTF prices could approach €65/MWh this summer to deter Asian demand and balance the market. The revised storage outlook and elevated price forecasts necessitate hedging strategies for gas users and signal continued volatility for commodity markets, potentially influencing broader inflation metrics.
Outlook
The trajectory of European gas prices will hinge on the de-escalation of Middle East tensions and the subsequent normalization of LNG flows through the Strait of Hormuz. Market participants will closely monitor geopolitical developments and European storage injection rates for further indications of winter supply adequacy and price direction.
