European gas prices hit €75/MWh, matching 2022 crisis levels

European natural gas prices surged to €75 per megawatt-hour on Wednesday, reaching levels not seen since late 2022, as the U.S.-Iran conflict and dangerously low storage reserves raise the specter of a second energy crisis heading into autumn.

The Dutch TTF benchmark, Europe's main gas price indicator, has climbed roughly 130 percent year-on-year, driven by fears that LNG shipments through the Strait of Hormuz could face further disruption. Around midsummer, TTF stood at just over €40 per MWh; by early August it had crossed €50, and by the end of the month it was above €70.news.err

Storage Shortfall Compounds the Pressure

EU gas storage facilities were just over 65 percent full as of this week — 16 percentage points below the five-year average and the lowest level at this point in the refill season in 15 years. Germany's reserves sit at just 53 percent. To reach the bloc's 90 percent target by November 1, Europe would need to add roughly 24 percentage points in under two months.voltstack+2

Goldman Sachs The Goldman Sachs Group, Inc. ↗ 3.34% analysts warned in late August that TTF prices could exceed €100 per MWh by December if the Strait of Hormuz remains disrupted and Asian competition for LNG cargoes intensifies. Kalvi Nõu, head of energy trading at Estonian firm Alexela, told ERR that "around €70 per megawatt-hour could be considered a baseline for winter TTF prices, although it is more realistic to talk about a range of €60–90".news.err+2

Wider Economic Fallout

The energy price spike is already reverberating through the European economy. Eurozone inflation accelerated to 3.3 percent in August, up from 2.9 percent in July, driven largely by rising energy costs. The European Central Bank is now widely expected to raise interest rates at its September 10 meeting.global.morningstar+1

According to analysis by the European Conservative, the EU's energy bill increased by $78 billion as a direct result of the Middle East situation — more than double the $35 billion cost borne by China. Eurostat recently reported the EU had slipped into a trade deficit for the first time in three years, with the energy balance deteriorating from negative €71.3 billion in the first quarter to negative €101.1 billion in the second.europeanconservative

Uncertain Path Forward

A rapid resolution of the Hormuz crisis could bring prices down sharply. Elenger Group CEO Margus Kaasik said reopening the strait would exert "significant downward pressure" on gas prices, but warned that further escalation would push them higher still. The EU's pivot away from Russian pipeline gas — down from 45 percent of supply before the war to 12 percent — has left the bloc heavily reliant on LNG imports that now face their own geopolitical risks.1news+1

As Swedbank economist Liis Elmik noted, "the market remains highly sensitive to further disruptions, and even temporary supply shocks could push prices significantly higher over the short term".news.err