Goldman Sachs Raises Europe Gas Price Forecasts to 2026 Highs Amid Middle East Tensions

Goldman Sachs has delayed expectations for LNG shipments from the Persian Gulf to normalize from July to October due to tensions in the region. This has led to projections of a 16 million ton (%4) annualized reduction in global LNG supply, potentially keeping North West Europe's TTF storage levels at 67% by October. The bank has raised its TTF price forecasts for Q3 and Q4 2026 to €60/MWh and €53/MWh, respectively, from previous estimates of €41/MWh and €40/MWh. For 2027, Goldman Sachs has adjusted its forecast to €31/MWh from €30/MWh. The bank warns that if Middle East energy exports only normalize gradually through 2027, TTF prices in Europe could rise above €100/MWh to meet Asia's demand. Conversely, if shipments recover quickly through the Strait of Hormuz, prices could fall to around €40/MWh. Additionally, new LNG projects in the US and potential increases in coal and renewable energy production in Asia could exert downward pressure on long-term gas prices. Currently, the August futures contract for TTF natural gas in the Netherlands closed at €59.66/MWh yesterday and has risen by 3.6% to €61.83/MWh today. The Middle East tensions are intensifying Europe's gas dependency, raising questions about how markets will react to this evolving scenario.