Europe's Gas Buffer Runs Thin as LNG Imports Fall Short

Europe's winter gas buffer is facing significant challenges as Northwest European LNG imports fell short of Goldman Sachs' expectations in July, impacting storage rebuilding. Despite maintaining its €60/MWh balance-of-third-quarter forecast for TTF prices, Goldman warns that actual Persian Gulf LNG exports and the pace of European storage rebuilding are more important variables than headlines around the potential reopening of the Strait of Hormuz.

Samantha Dart, co-head of Global Commodities Research at Goldman Sachs, notes that while the market's focus has been on the Strait of Hormuz, the key factor is how quickly European storage can be rebuilt. Northwest European LNG imports missed Goldman's July forecast by a significant 21 million tonnes per annum (mtpa), mainly due to lower global LNG supply from Russia and Qatar.

Northwest Europe also captured a smaller-than-expected share of total European LNG imports, resulting in fewer molecules reaching Europe and storage rebuilding falling behind schedule. The Northwest European inventories finished July at around 43% of capacity, below Goldman's 45.5% expectation. The bank estimates that reaching its 67% end-of-October storage target looks difficult but achievable if Qatari exports recover.

Goldman continues to see the risks surrounding its winter TTF forecast as skewed to the upside. If Middle East energy exports normalize only gradually, Goldman estimates December 2026 TTF could exceed €100/MWh, around 110% above its €50/MWh base case.