European natural gas prices climbed above €70 per megawatt-hour on Monday, a level not seen since March, as escalating conflict between the United States and Iran raised fears of prolonged disruption to liquefied natural gas (LNG) shipments from the Persian Gulf. The front-month contract on the Dutch TTF hub, the continent's benchmark, rose more than 5% during midday trading in Europe.
The spike follows Sunday's US strikes on Iranian rocket launchers near the Strait of Hormuz and Iran's retaliatory missile attack on US forces in Jordan. The strait, through which roughly one-fifth of global LNG trade normally passes, remains effectively closed, heightening concerns about supply security just as Europe enters its critical storage-refilling season.
Storage levels lag behind historical norms
EU gas storage facilities were 64.7% full as of the latest data from Gas Infrastructure Europe (GIE), below the usual level for this time of year. High wholesale prices have slowed the refilling process across many member states, putting at risk the legally binding targets that require the Netherlands and Germany to reach 80% and 70% capacity, respectively, by 1 November.
The problem is partly economic: the price spread between summer and winter contracts has often been too narrow—or even negative—to justify the cost and risk of storing gas. Normally, suppliers buy gas in the summer at lower prices, store it, and sell it in winter at a premium. With that incentive weakened, many are holding back.
Low storage levels do not automatically mean shortages, but they leave EU countries more exposed to volatile prices and supply shocks. That is a particular worry for Germany, the bloc's largest economy.
“If insufficiently filled gas storage facilities coincide with a very cold winter, Germany may no longer be able to cover normal gas demand in full,” said Sebastian Heinermann, managing director of the German gas-storage association INES. “If gas prices then rise above the level that industrial consumers can afford, companies will be forced to reduce production,” he added, warning of substantial economic damage.
Italy faces supply cut despite high storage
Italy, which boasts one of Europe's highest storage levels, is also feeling the strain. Last Thursday, QatarEnergy informed Italian utility Edison, one of its largest European customers, that it had extended its force majeure suspension of LNG deliveries until early November because of the US-Iran war, according to Reuters. The long-term contract normally supplies the equivalent of about 10% of Italy's annual gas consumption. Edison said it was securing replacement supplies and could still meet its commitments to customers.
The EU imports relatively little gas directly from the Middle East—Qatar supplied just 3.7% of the bloc's overall gas imports in 2025—but disruptions in the Gulf still push up European prices. Analysts warn that a prolonged halt to Gulf LNG exports could force European buyers to compete more aggressively with Asian buyers for available cargoes, potentially driving wholesale prices toward €100 per megawatt-hour.
Goldman Sachs analysts Samantha Dart and Laura Cyr wrote in a note cited by Bloomberg: “In a scenario where Middle East energy exports normalise only gradually through 2027, we estimate that December 2026 TTF would likely need to move above €100/MWh.”
Impact on household bills
If the current price spike proves short-lived, its effect on household bills may be minimal. But with no clear sign of de-escalation, a sustained increase could gradually feed through to consumer energy prices across Europe. According to Oxford Economics, wholesale price changes take on average about six months to be fully reflected in consumer bills, though the timing varies widely. Prices can respond within months in France, Italy and Spain, and almost immediately in the Netherlands, but may take nearly a year to peak in Germany and Austria.
For businesses and households alike, the situation underscores Europe's continued vulnerability to global energy shocks. As the continent works to fill its storage ahead of winter, the combination of geopolitical tension and market dynamics is creating a precarious outlook. For more on the broader challenges, see Europe's winter gas crunch and the doubling of gas prices.
