Investment bank Goldman Sachs has issued a stark warning that Europe's natural gas market could be heading for a significant supply crisis, with prices potentially doubling from current forecasts if disruptions to LNG exports from the Strait of Hormuz persist.
The firm projects that the December 2026 TTF natural gas futures contract could surge past 100 euros per megawatt-hour under this scenario, more than double its baseline forecast of 50 euros. This comes as Europe's gas storage levels sit at just 61.68% capacity, well below the 15-year seasonal average of 72.5%, with injections having lagged expectations since August.
Market pressure is already evident, with the Dutch TTF front-month futures contract climbing to 67 euros per megawatt-hour on Monday morning, a level not seen since early 2023.
Goldman Sachs commodity analyst Samantha Dart explained that if the situation in the Strait of Hormuz fails to improve, European gas prices will need to climb further to attract more LNG cargoes to the region. In the most bearish scenario, where Persian Gulf energy exports only slowly recover by 2027, the bank projects TTF prices could exceed 100 euros per megawatt-hour by the end of 2026.
Dart noted that such elevated price levels have only previously been reached during the 2022 European energy crisis, leaving considerable uncertainty around demand response dynamics. She characterized the potential price movement above 100 euros as a "price discovery process" rather than a predictable outcome.
The restoration of LNG flows through the Strait of Hormuz is viewed by Goldman Sachs as the pivotal factor determining future European gas prices. Should export restrictions continue, competition for LNG between Europe and Asia would intensify, forcing TTF prices higher to enhance Europe's attractiveness in the spot market.
There have been recent signs of easing tensions, with the CEO of TotalEnergies stating on Monday that crude oil is currently passing through the critical waterway "very calmly." However, whether this moderation will translate into a meaningful recovery in LNG supply remains uncertain.
Goldman Sachs also highlighted that energy market pressures extend beyond natural gas, with the diesel market facing similar supply constraints. For Europe, the combination of low inventory levels and restricted LNG supply makes the situation in the Strait of Hormuz a critical indicator for energy prices and supply security this winter.