Europe Must Pay Way More for Gas to Secure Winter Supply, Goldman Warns

According to Goldman Sachs, natural gas prices in Europe must increase significantly by December to ensure the continent can secure sufficient inventory for the upcoming winter. This price hike will be necessary if the ongoing crisis in the Strait of Hormuz continues to drive up spot LNG prices in Asia.

Since the onset of the Middle East crisis, Europe has struggled to compete with Asia for spot LNG shipments, especially with the bulk of Qatari term contract volumes currently unavailable. This heightened competition and regional instability coincide with Europe’s critical spring and summer restocking period.

Data from Gas Infrastructure Europe indicates that European storage facilities are currently only 62% full. This represents the lowest inventory level for this time of year in nearly two decades, falling well below the five-year average. With stockpiles at a 17-year low and market supply tighter than in 2022, Europe faces a pressing need to purchase gas immediately to avoid potential winter shortages.

This supply squeeze and market uncertainty have driven up costs, leaving European buyers lagging behind Asian competitors for limited LNG volumes. Goldman Sachs analysts noted that current benchmark prices at the Dutch Title Transfer Facility (TTF) are insufficient to help Europe manage its winter storage requirements.

In a scenario where Middle East energy exports recover only gradually through 2027, Goldman Sachs estimates that December 2026 TTF prices would likely need to exceed €100/MWh to attract necessary supplies. This target is 110% higher than the firm’s baseline forecast of €50/MWh.

Currently, Dutch TTF Natural Gas Futures are trading around €66.85 ($78) per MWh. This remains well below the €100 ($116) per MWh threshold that analysts believe is required to accelerate European stockpiling over the coming months.