Middle East tensions and concerns over fuel supplies keep European gas markets volatile as storage levels remain unusually low
BRUSSELS: European natural gas prices have climbed sharply during preparations for the 2026 heating season, averaging 52% above their level over the previous three years, according to an analysis of trading data.
Between April 1 and August 14, settlement prices for gas futures linked to the Netherlands-based TTF benchmark averaged $585.3 per thousand cubic metres. The figure stood 41.2% higher than during the corresponding period in 2025 and 52% above the 2023-2025 average.
However, current prices remain substantially below levels recorded during the 2022 European energy crisis, when gas averaged $1,373.7 per thousand cubic metres.
Middle East Conflict Drives Market Volatility
Meanwhile, instability in the Middle East has added significant pressure to European energy markets amid concerns about disruptions to international fuel supplies.
Average European gas prices jumped nearly 60% month-on-month in March, exceeding $600 per thousand cubic metres. Subsequently, prices remained volatile as geopolitical uncertainty continued affecting traders’ expectations.
In July, settlement prices increased almost 20% from June, reaching an average of $637.5 per thousand cubic metres.
Europe Faces Winter Storage Challenge
At the same time, European countries are injecting gas into underground storage facilities ahead of winter. These reserves can provide up to one-third of Europe’s gas requirements during colder months, making adequate inventories critical for energy security.
However, storage facilities currently remain only slightly above 60% full, reportedly their lowest level for this stage of the year.
Consequently, the European Union has reduced its winter storage requirement from 90% to 80% amid uncertainty surrounding the Strait of Hormuz and international energy supplies.
Nevertheless, concerns persist over whether Europe can rebuild inventories quickly enough.
Russia’s Gazprom has projected that European storage levels could remain below 75% by October 1 if injections continue at their current pace.
