European gas markets are confronting renewed supply pressures that could escalate significantly. Goldman Sachs has issued a stark warning: if LNG exports through the Strait of Hormuz remain disrupted, Dutch TTF gas futures for December 2026 could surge past 100 euros per megawatt hour, more than doubling the firm's previous baseline forecast of 50 euros.

This extreme scenario is fueled by a confluence of dangerously low gas storage levels across Europe and tightening global LNG supply. The front-month TTF contract on the Dutch exchange briefly climbed to 67 euros per megawatt hour on Monday morning, marking its highest point since early 2023. Simultaneously, Europe's gas storage facilities are only at 61.68% capacity, a figure well below the 15-year seasonal average of 72.5%, with injections having consistently missed expectations since August.

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 supply towards the continent. In the most pessimistic scenario, where Persian Gulf energy exports don't recover until 2027, the bank projects December 2026 TTF prices could exceed 100 euros per megawatt hour. Dart noted that since LNG prices only reached such elevated levels during the 2022 European energy crisis, there is considerable uncertainty surrounding demand responses at prices above 100 euros, leading her to frame this as more of a "price discovery process."

The Strait of Hormuz as a Critical Variable

Goldman Sachs identifies the restoration of LNG flows through the Strait of Hormuz as the decisive factor shaping future European gas price trends. Should exports remain constrained, competition for LNG between Europe and Asia will intensify, forcing TTF prices higher to enhance Europe's attractiveness for spot LNG cargoes. Recent developments have offered some signs of de-escalation, with the CEO of TotalEnergies stating on Monday that crude oil is currently passing through this vital waterway "very calmly." However, whether this easing will translate into a substantial recovery in LNG supply remains to be seen.

The bank also cautioned that energy market pressures extend beyond natural gas, with diesel markets equally facing supply tightness. For Europe, the combination of low inventories and restricted LNG supply makes the Strait of Hormuz situation the critical focal point for determining energy prices and supply security this winter.