Goldman Sachs says Europe may need €100 gas to survive winter

European natural gas prices may need to surge well beyond current levels to ensure the continent can build adequate winter stockpiles, Goldman Sachs The Goldman Sachs Group, Inc. ↘ 0.36% warned in a note published Sunday.

The bank's analysts Samantha Dart and Laura Cyr estimated that December 2026 TTF prices — Europe's benchmark — would likely need to rise above €100 ($117) per megawatt-hour if Middle East energy exports normalize only gradually through 2027. That level represents a 110% premium over Goldman's base-case forecast of €50/MWh.bloomberg+2

Strait of Hormuz Disruptions Squeeze Supply

The U.S.-Iran conflict has reduced shipments through the Strait of Hormuz to a trickle, intensifying competition between Europe and Asia for limited LNG cargoes. Dutch front-month futures, Europe's gas benchmark, rose to a five-month high above €65/MWh last week, but Goldman said even that rally falls short of what is needed.theedgemarkets+1

"At current levels, prices will not be enough for Europe to manage storage through winter," the analysts wrote. Under Goldman's analysis, prices must rise high enough to suppress Asian LNG demand through price mechanisms, freeing cargoes to be redirected to Europe.bitget+1

Storage Deficits Mount

Europe's inventory restocking, normally carried out during summer months, has lagged this year. At current rates, Northwest European gas storage will end August at 51% full — 3.4 percentage points below Goldman's base case. The shortfall comes as U.S. President Donald Trump has announced plans for what he called an "economic D-Day" on Iran, with new sanctions expected imminently.theedgemarkets

Weather May Offer Relief

One potential bright spot lies in the weather outlook. A report from Rystad Energy this month suggested that if a "super" El Niño pattern adds at least 2°C to historical average winter temperatures, reduced heating demand could offset low inventories. Goldman's current outlook, however, assumes average winter temperatures, leaving little margin for error should the conflict persist.theedgemarkets