European Natural Gas Prices Surge Nearly 50% in Recent Months, Approaching Iran War Highs
Taylor Wilson
Europe's benchmark Dutch TTF gas contract topped €62 per megawatt-hour on Wednesday, up roughly 49% since late June and closing in on the highs set when the US-Iran conflict first erupted. Heatwaves, nuclear cutbacks, LNG cargoes diverted to Asia, and lagging storage — four pressures are converging into a real winter-supply risk.
How much has gas risen — and how does it compare to oil?
The Dutch TTF contract hit over €62/MWh on Wednesday, up about 49% since late June, nearing the early US-Iran conflict peak.
UK gas rose by a similar 49% over the same period, to 151.29 pence per therm.
Brent crude, by contrast, gained roughly 20%, to above $93 a barrel. This means → gas is far more sensitive to the geopolitical shock than oil.
Why is the surge happening now, not months ago?
Rystad Energy analyst Christoph Halser notes that in March and April, Europe had just exited winter; demand was low, and the same conflict headlines barely moved prices.
Now, with the heating season approaching, the restocking window is narrowing — every development in the US-Iran standoff hits harder.
In plain terms = the same bad news that meant "we have time" in early summer now means "we're running out of time."
What is going wrong on the supply side?
Heatwaves boost electricity demand → air-conditioning load surges; some French nuclear plants — which must reduce output in extreme heat to protect cooling-water sources — cut production → gas-fired power fills the gap, consuming extra gas.
Asia is outbidding Europe for LNG cargoes. France expects just 13 LNG deliveries in July, the lowest monthly figure in over five years. Another 8 cargoes originally bound for August have been diverted to Asia, dropping the expected tally to 26.
Halser says European gas prices, despite their rally, are still not high enough to pull LNG back from Asia. This means → Europe is currently losing the global bidding war for gas.
Is storage on track for winter?
Germany aims to fill its storage facilities to 70% by early November but has reached only 45% so far.
Equinor, Europe's largest gas supplier, warned Wednesday that Europe may not meet its storage targets before winter — setting the stage for sharp price swings.
CFO Torgrim Reitan told Bloomberg TV: "This is a fragile situation, and we are very uncertain about how we enter the winter."
Is the Strait of Hormuz the key variable?
Rystad's base case assumes the Strait of Hormuz — the narrow waterway connecting the Persian Gulf to open seas — will reopen by Q4, allowing Qatar to resume full LNG exports.
But if the blockade drags on, Europe may fail to hit its storage targets. The IEA warned this week that "further delays in restoring Gulf exports could keep the market tight."
This reflects a stark reality: Europe's entire gas-security outlook hinges, to a remarkable degree, on one chokepoint's navigability.
Is Europe more vulnerable now than during the Russia-Ukraine crisis?
Halser notes that since the Russia-Ukraine conflict, Europe has cut annual gas consumption by roughly 20% and built several new LNG import and regasification terminals.
This means → the importance of full storage is lower than it used to be — new import capacity can partly compensate even if tanks are not topped up.
But he stresses this does not fully eliminate winter-shortfall risk. In plain terms = Europe's resilience is stronger than two years ago, but nowhere near strong enough for complacency.
Content is for reference only, not financial advice.