European Gas Market Faces Constrained Exports and US Supply Surge

The European gas market is facing a complex situation as it grapples with two distinct factors: constrained Persian Gulf LNG exports and an influx of US LNG supply. According to Goldman, the fourth-quarter 2026 TTF forecast has been raised to €70/MWh from €53/MWh due to slower-than-expected normalization of Persian Gulf LNG exports.

LNG flows through the Strait of Hormuz have remained at only 15% to 25% of prewar levels, leaving Europe reliant on high prices to deter demand elsewhere and attract flexible cargoes. This has resulted in northwest European storage being forecasted to fall to 19% by the end of March 2027, increasing winter risks.

However, the longer-term balance is softened by new US LNG projects and weak Chinese gas demand. Goldman has subsequently cut its average 2030 to 2035 TTF forecast to €19/MWh.