The leading benchmark for natural gas prices in Europe is expected to be higher in the first half of 2026 than initially projected, reflecting the impact of production disruptions due to the Iran conflict, according to estimates from Goldman Sachs.

In a note, the analysts including Samantha Dart and Frederik Witzemann raised their April forecast for the European regional benchmark for gas — the — to 55 euros/MWh, up from 36 euros/MWh previously. The average second-quarter TTF forecast is 45 euros/MWh, compared to an initial outlook of 36 euros/MWh, the strategists added.

On Tuesday, the TTF had last risen by more than 31% to 58.60 euros/MWh, hovering around its highest levels since 2023.

Underpinning the spike has been the closure of production of liquefied natural gas at Qatar’s state-owned energy company, which effectively choked off a major supply of the world’s fuel.

The firm, QatarEnergy, said on Monday that it would halt LNG output and related products following strikes on two of its gas facilities. The TTF soared to a one-year peak in the wake of the announcement.

Concerns have also swirled around the status of the key Strait of Hormuz, a vital waterway through which much of global oil and gas shipments pass. Iranian officials has vowed to attack any ship attempting to traverse the strait.

This has threatened to become a significant issue for Europe, which imports around 5% of its gas from the Middle East. Analysts at Goldman Sachs said that the TTF could increase 130% from where it was trading last week, potentially placing natural gas prices back in territory last seen following the outbreak of the war in Ukraine in 2022.

Uncertainty around the duration of the Qatari outage and the reliability of Strait of Hormuz flows, combined with higher-than-expected usage of gas for electricity in Europe last winter, will “drive TTF prices temporarily higher still,” the Goldman analysts wrote.
Further constraints on the supply of natural gas to Asia could raise the need for alternatives produced in the U.S. and elsewhere, the New York Times reported, citing the Center for Strategic and International Studies. Gas prices in Europe, where gas storage levels are already muted, may continue climbing even after QatarEnergy restarts output as a result, the report said.
Source: Investing.com