Why European Gas Prices Could Exceed €100/MWh This Winter

Goldman Sachs’ warning is a conditional tight-supply scenario, not a prediction that European gas prices will inevitably reach €100/MWh. If Persian Gulf LNG exports recover only gradually, Europe may need to pay more than €100/MWh for December 2026 Dutch TTF gas to attract enough cargoes away from Asia and rebuild inventories before winter. 1718

The core problem: Europe is competing for flexible LNG

Europe relies on seaborne liquefied natural gas (LNG) to balance its gas system. When supplies from the Persian Gulf are disrupted, the market has fewer cargoes available at the same time that Europe needs to refill storage.

Asian buyers are the critical source of competition. If Asian spot demand remains strong and Middle East exports stay constrained, European prices must rise high enough to redirect flexible LNG cargoes toward the continent. Goldman’s argument is therefore not simply that gas is “fairly valued” above €65/MWh. It is that current prices may not provide a sufficient incentive for suppliers to change where those cargoes go. 18

Why €65/MWh may not be enough

Dutch front-month futures recently moved above €65/MWh, reaching a five-month high, but Goldman Sachs said that rally might still fail to secure enough LNG if Middle East disruptions extend into next year. At current rates, the bank expects Northwest European storage to reach only 51% full by the end of August, which is 3.4 percentage points below its base case. 18

That shortfall matters because storage is Europe’s buffer against cold weather, demand spikes and further supply disruptions. If injections remain too slow during the rest of the refill season, the market may need a much higher winter price to encourage additional LNG purchases and protect inventories.

The Strait of Hormuz is the main swing factor

The outlook depends heavily on how quickly LNG flows through the Strait of Hormuz normalize. A faster recovery would increase available supply and reduce the premium Europe needs to pay. A slower recovery would keep Asian LNG prices elevated and intensify the competition for cargoes.

Goldman’s more severe scenario assumes Middle East energy exports normalize only gradually through 2027. Under that condition, December 2026 TTF prices could exceed €100/MWh. In a more favorable scenario, where Hormuz flows normalize faster, the bank’s analysis points to materially lower winter prices. 17

This makes the €100/MWh figure a stress-case threshold tied to supply incentives, rather than Goldman’s unconditional base forecast.

Europe’s storage position leaves less room for error

EU gas storage was reported at about 62% of capacity in mid-August 2026, compared with 74% at the same point a year earlier. Separate data cited by UBS put storage below a five-year average of 79%, while net injections were also running below the seasonal norm. 36

The figures are not identical across reporting dates and datasets: Enerdata reported storage at 61% on August 19, while the European Commission cited roughly 62% on August 20. 34 The direction is consistent, however. Europe is entering the final part of the injection season with inventories below recent historical levels and with expensive gas discouraging some purchases for storage. 36

A thinner starting buffer does not automatically mean that Europe will run out of gas. It does mean that the market becomes more sensitive to any combination of delayed LNG recovery, stronger Asian demand or unexpectedly high winter consumption.

Why the European Commission’s view is less alarmed

The European Commission said there was no immediate concern about EU gas supply, despite storage being near 62% of capacity. The Commission’s assessment focuses on immediate security of supply and the availability of diversified sources for the coming winter. 23

Goldman Sachs is examining a different risk: the price Europe may need to pay to secure marginal LNG and build a sufficiently large buffer before winter. Those positions can coexist. Europe may face no immediate physical shortage while households, businesses and power markets remain exposed to high and volatile prices if the supply margin narrows.

The market is already reflecting broader concern about winter energy costs. European winter electricity contracts have traded at a premium of more than 20% to the following year’s benchmark, with low gas inventories and weaker hydropower reserves among the factors raising the risk of higher costs.

What would ease—or worsen—the outlook?

The most important relief would be a faster restoration of Persian Gulf LNG exports. Lower Asian spot demand and greater LNG availability in the Atlantic Basin would also reduce the price needed to bring cargoes into Europe. Goldman’s analysis described reaching a 67% Northwest European storage target by the end of October as difficult but achievable if Qatari exports recover and market demand remains restrained. 17

The downside is the reverse: a prolonged regional conflict or continued shipping disruption would leave Europe with fewer accessible LNG cargoes and less time to rebuild storage. In that setting, the market could require a sharp price increase—not necessarily because gas has already run out, but because high prices are the mechanism used to ration demand and attract competing supply.

Bottom line

Goldman Sachs is warning about Europe’s margin for error, not declaring an unavoidable gas crisis. With EU storage around 62% in mid-August and Northwest European inventories tracking below Goldman’s base case, prices above €65/MWh may still be insufficient if Europe must compete with Asia for scarce LNG. 3618

If Hormuz-related disruptions fade quickly, the €100/MWh scenario may not materialize. If exports recover slowly, however, December 2026 TTF could need to rise above that level to pull enough LNG into Europe and rebuild a safer winter inventory cushion. 1718