Key Takeaways
- Qatar’s shutdown of LNG facilities after Iranian drone attacks on the Ras Laffan complex triggered a 40%+ surge in European gas prices
- All liquefied natural gas production at QatarEnergy facilities has been suspended following strikes on two gas installations
- More than one-fifth of worldwide LNG supply is blocked due to the Strait of Hormuz closure
- Goldman Sachs revised its Q2 TTF projection upward to 45 euros/MWh from 36 euros/MWh, cautioning prices may surge 130% above last week’s trading levels
- Depleted gas storage inventories across Europe are intensifying the supply crisis as the refill season begins
Natural gas prices across Europe have skyrocketed for the second consecutive session following Qatar’s complete suspension of liquefied natural gas operations. The TTF Dutch benchmark, Europe’s primary gas pricing indicator, climbed over 40% to exceed 62 euros per megawatt-hour during Tuesday trading.
The dramatic price movement came after QatarEnergy announced the complete shutdown of LNG operations at its Ras Laffan industrial facility. The energy giant cited Iranian drone attacks on two of its natural gas installations as the reason for suspending production.
As the planet’s second-biggest LNG exporter, Qatar predominantly serves Asian markets. However, any extended disruption would force buyers from both Asia and Europe into fierce competition for scarce supplies in international spot markets.
Market tensions were already escalating prior to the production stoppage. Gas futures began their upward trajectory Monday following Iran’s effective blockade of the Strait of Hormuz, a critical maritime passage connecting the Persian Gulf to global markets.
The Strait of Hormuz facilitates the transport of over 20% of the world’s LNG shipments. Iranian authorities have issued threats to target any vessels attempting passage through the waterway.
Energy analysts from ANZ described the situation as “the most significant danger to international gas markets since Russia’s 2022 invasion of Ukraine.” That previous conflict drove European gas to unprecedented price levels and sparked an energy emergency across the continent.
Goldman Sachs Revises Gas Price Projections Upward
Goldman Sachs commodity experts, including Samantha Dart and Frederik Witzemann, have increased their April TTF price projection to 55 euros per megawatt-hour. This represents a substantial increase from their prior forecast of 36 euros per megawatt-hour.
The investment bank now expects an average second-quarter 2026 price of 45 euros per megawatt-hour, revised upward from the previous 36 euros estimate. Goldman’s analysis suggests prices could potentially spike by as much as 130% compared to last week’s trading range.
By Tuesday, TTF prices had already climbed more than 31% to approximately 58.60 euros per megawatt-hour. This positions the benchmark near its peak levels last seen in 2023.
While Europe sources roughly 5% of its natural gas from Middle Eastern suppliers—a smaller percentage than Asia’s dependence—the ripple effects through global spot markets are already driving significant price appreciation.
Low Storage Inventories Compound Supply Concerns
Europe’s gas storage facilities are currently operating below typical seasonal averages as the continent enters the critical period for replenishing reserves before the upcoming winter season. Unexpectedly high consumption for power generation during the previous winter has exacerbated the supply deficit.
Goldman’s research team emphasized that uncertainty surrounding the duration of Qatar’s production suspension, coupled with continued threats to maritime traffic through the Strait of Hormuz, will “push TTF prices temporarily even higher.”
While alternative supply options exist, they remain constrained. The United States has capacity to boost LNG shipments, though energy traders indicate American production alone cannot compensate for a prolonged absence of Qatari exports.
The Center for Strategic and International Studies informed the New York Times that restricted gas availability in Asia might redirect Asian purchasers toward American and other non-Middle Eastern suppliers. Market analysts suggest European prices could continue their upward trajectory even after QatarEnergy resumes normal operations.
Goldman Sachs noted Tuesday morning that the TTF benchmark was trading near its strongest levels since 2023.
