Replay of the 2022 crisis? Goldman Sachs: Reserves too low, European gas prices may exceed 100 euros this winter!

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The European natural gas market is facing a new round of supply pressure. Goldman Sachs warns that if LNG exports through the Strait of Hormuz remain obstructed, the December 2026 TTF natural gas futures price could exceed 100 euros per megawatt-hour, more than double the previous benchmark forecast of 50 euros.

This extreme scenario is driven by Europe’s relatively low gas storage levels and tightening global LNG supply. On Monday morning, the Dutch TTF front-month futures briefly surged to 67 euros per megawatt-hour, hitting a new high since early 2023. Meanwhile, Europe's gas storage level is only 61.68%, significantly lower than the 15-year seasonal average of 72.5%, and gas injections since August have consistently fallen short of expectations.

Goldman Sachs commodities analyst Samantha Dart stated that if exports through the Strait of Hormuz do not improve soon, European gas prices will need to rise further to attract more shipments to Europe.

In the most pessimistic scenario, where energy exports from the Persian Gulf only slowly recover by 2027, Goldman Sachs expects the December 2026 TTF price could exceed 100 euros per megawatt-hour. Dart pointed out that since LNG prices only reached such highs during the 2022 European energy crisis, there is still insufficient understanding of the scale of demand responses at prices above 100 euros, and she prefers to regard this as a “price discovery process.”

The Strait of Hormuz Becomes the Key Variable

Goldman Sachs believes that whether LNG flows through the Strait of Hormuz can recover is the core variable determining the future trend of European gas prices. If exports remain restricted, competition for LNG between Europe and Asia will further intensify, and the TTF will need higher prices to enhance Europe’s appeal for spot LNG cargoes.

Recently, there have been signs of easing tensions. TotalEnergies’ CEO stated Monday that crude oil is currently passing through this key waterway “very calmly.” However, whether this easing will lead to a substantial recovery in LNG supply remains to be seen.

Goldman Sachs also reminds that pressure in the energy market isn’t limited to natural gas—the diesel market is also facing supply tightness. For Europe, currently low inventories combined with restricted LNG supply make the situation in the Strait of Hormuz a key window to observe for this winter’s energy prices and supply security.

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