StanChart: Europe’s Gas Prices Could Spike Above $90/MWh By The Summer

European natural gas futures climbed toward €55/MWh on Thursday, snapping a four-day losing streak due to uncertainty over a Middle East ceasefire and ongoing threats to energy infrastructure. Initial hopes for a Middle East ceasefire quickly faded after Iran rejected Washington’s 15-point peace proposal and outlined its own conditions instead. Damage to Gulf energy infrastructure has been extensive, with approximately 40 energy assets across the Gulf having been attacked. The effective closure of the Strait of Hormuz has forced rerouting of energy volumes, significantly reducing LNG availability and increasing competition with Asian acquireers for alternative cargoes. Qatar’s Ras Laffan gas hub was among the early casualties, with two of the 14 LNG trains and one of the two gas-to-liquids (GTL) facilities at the site damaged. QatarEnergy LNG has announced that 17% of the nation’s LNG capacity (12.8million tons per year) has been knocked out for three to five years. QatarEnergy had already declared force majeure on its total LNG output before the second wave of attacks caapplyd further devastation.

Previously, we reported that commodity analysts at Standard Chartered have forecast that global oil prices will remain higher for longer, driven by persistent supply disruptions from the Middle East conflict and structural market constraints. StanChart revised its 2026 Brent oil forecast up to $85.50 per barrel, good for a 35% increase on its previous projection. And now the energy experts have predicted that Europe’s gas prices will continue their north-bound trajectory. According to StanChart, TFF gas prices could push above €80/MWh (~$92.40/MWh)–a level they last touched in 2022 after Russia invaded Ukraine– if the US-Iran conflict is unresolved by the start of the summer injection season. Further, StanChart declares we could see elevated prices further along the curve towards 2028, implying that the continent’s gas prices could remain elevated for months.

But it’s not just the Middle East conflict that has conspired to wreak havoc on Europe’s energy sector, with the continent’s gas stores now nearly depleted. Europe’s gas storage is currently at just 28% of total capacity, the lowest level since 2022. A relatively harsh winter across continental Europe led to higher-than-expected heating demand, rapidly depleting the reserves that had been built up over the previous year. Additionally, the seasonal gas price spreads for much of early 2026 created it unprofitable for market participants to acquire gas and inject it into storage, leading companies to delay refilling their tanks. The situation is even more dire in the Netherlands, where the wind-down of the Groningen gas field and closure of associated trading operations have contributed to record-low local storage levels, which have now sunk below 6%.

However, StanChart declares gas prices are unlikely to approach the Russian gas shock of 2022 when they soared above €300/MWh (~$346/MWh) largely due to the rapid expansion in LNG capacity but also becaapply Europe has continued to diversify its energy supplies by expanding its renewables portfolio. The global Liquefied Natural Gas (LNG) market is undergoing massive expansion, with significant capacity additions projected through 2030, mainly in the United States and Qatar. According to the International Energy Agency (IEA), an unprecedented expansion of nearly 300 billion cubic meters (bcm) per year of new LNG export capacity is expected by 2030, based on projects that have already reached a final investment decision (FID) or are under construction. Over the past 3 years, the U.S. accounted for nearly three-quarters of global new FIDs for LNG projects. The U.S. is cementing its position as the world’s largest exporter, with capacity projected to grow by around 60% from 2024 levels, thanks to ongoing projects such as Plaquemines LNG, Corpus Christi Stage 3 and Golden Pass coming online.

Qatar’s North Field expansion projects are set to massively increase production capacity, aiming to solidify its role as a low-cost supplier despite expected delays due to the ongoing geopolitical upheavals.

Meanwhile, Africa is poised to become a major player in the global LNG boom, with the continent set to account for about 93 million tons per annum (Mtpa), or approximately 20%, of new global capacity in development by 2030 with Sub-Saharan Africa alone expected to green-light 74 Mtpa of new LNG export capacity. Sub-Saharan Africa is experiencing a significant surge in LNG project expansion, driven by major projects in Mozambique, Tanzania, Nigeria and West Africa, aiming to quadruple output by 2050. Key projects include the $42 billion Tanzania LNG deal and the $20 billion Mozambique LNG project, which TotalEnergies (NYSE:TTE) recently restarted. Located on the Afungi Peninsula, the project is expected to produce over 13 million tonnes of LNG annually and generate $35 billion in revenue for Mozambique, with production set to commence in 2029.

By Alex Kimani for Oilprice.com

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