Middle East Conflict Sends Gas Prices Soaring Across Global Markets
The ongoing conflict in the Middle East has sent shockwaves across global gas markets. According to Goldman Sachs, European natural gas prices are expected to surge due to prolonged disruptions in liquefied natural gas (LNG) flows through the Strait of Hormuz.
The US investment bank has revised its short-term forecast for European natural gas prices at the Dutch Title Transfer Facility (TTF), increasing it from €41/MWh to €60/MWh for the third quarter. The forecast for the fourth quarter has also been raised from €40 to €53/MWh, and the 2027 projection has been increased from €30 to €31/MWh.
The sharp upward revisions demonstrate how quickly geopolitical risks can affect energy prices. The market is pricing in uncertainty over how long supply disruptions may last, how quickly LNG infrastructure can return to normal operation, and whether alternative suppliers can compensate for lost volumes.
Europe's pivot away from Russian pipeline gas has made it structurally reliant on LNG, which is a globally traded commodity. Any disruption to major exporters translates almost immediately into upward pressure on European prices.