Goldman Sachs Projects 130% Surge in European Natural Gas Prices

Key Takeaways

Table of Contents

European natural gas prices soared more than 40% following Qatar’s decision to suspend LNG production after Iranian drone attacks on the Ras Laffan facilities
QatarEnergy halted all liquefied natural gas production after strikes damaged two key facilities
More than one-fifth of the world’s LNG supply is threatened by the Strait of Hormuz closure
Goldman Sachs increased its Q2 TTF price projection to 45 euros/MWh from 36 euros/MWh, cautioning prices may climb 130% above previous week’s trading levels
Depleted European gas storage reserves entering the critical rebuild period are intensifying the supply crisis

Natural gas prices across Europe have experienced a dramatic two-day rally following Qatar’s suspension of its liquefied natural gas operations. The Dutch TTF benchmark, serving as Europe’s primary gas pricing reference, skyrocketed beyond 40% to exceed 62 euros per megawatt-hour during Tuesday’s trading session.

The dramatic price movement came after QatarEnergy announced a complete shutdown of LNG operations at its Ras Laffan facility. The energy giant cited Iranian drone attacks on two of its critical gas installations as the reason for suspending production.

As the planet’s second-biggest LNG exporter, Qatar’s primary market focus is Asia. However, an extended shutdown would create fierce competition between Asian and European purchasers scrambling for available supply in global spot markets.

Market tensions were already escalating before the production stoppage. Gas futures began their upward trajectory Monday following Iran’s effective blockade of the Strait of Hormuz, a critical maritime corridor at the Persian Gulf’s entrance.

The Strait of Hormuz facilitates the passage of over 20% of worldwide LNG shipments. Iranian authorities have issued warnings to attack vessels attempting navigation through the waterway.

ANZ analysts characterized the situation as “the biggest threat to world gas markets since Russia invaded Ukraine in 2022.” That military action propelled European gas costs to unprecedented levels and sparked an energy emergency across the continent.

Goldman Sachs Revises European Gas Projections Upward

Goldman Sachs research team, led by Samantha Dart and Frederik Witzemann, elevated their April TTF price projection to 55 euros per megawatt-hour. This represents a significant increase from their prior 36 euros per megawatt-hour estimate.

The investment bank’s updated second-quarter 2026 average forecast now stands at 45 euros per megawatt-hour, up from the earlier 36 euros projection. Goldman’s analysis suggests prices could potentially surge by as much as 130% compared to the previous week’s trading levels.

TTF prices had already climbed over 31% to approximately 58.60 euros per megawatt-hour by Tuesday. This positions the benchmark near its peak levels last seen in 2023.

Middle Eastern sources account for roughly 5% of European gas imports. Despite this relatively modest proportion compared to Asia’s dependence, indirect market pressures through global spot trading are driving significant price increases.

Storage Deficit Compounds European Supply Concerns

Europe’s gas inventory levels are tracking below historical seasonal averages as the continent enters the crucial storage replenishment phase before the upcoming winter. Unexpectedly high gas consumption for power generation during the previous winter has exacerbated the deficit.

Goldman’s research team emphasized that uncertainty surrounding the duration of Qatar’s production halt, coupled with persistent threats to Strait of Hormuz maritime traffic, will “drive TTF prices temporarily higher still.”

While alternative supply sources are available, their capacity is constrained. U.S. LNG exports could potentially expand, though market experts indicate American production alone cannot adequately compensate for a prolonged absence of Qatari supply.

The Center for Strategic and International Studies informed the New York Times that restricted gas availability for Asia might redirect Asian purchasers toward U.S. and other non-Middle Eastern suppliers. Market analysts predict European prices could maintain elevated levels even following QatarEnergy’s production resumption.

Goldman Sachs noted the TTF was trading near its strongest levels since 2023 as of Tuesday morning.

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