Europe’s benchmark natural gas prices were on track early on Friday for a 50% weekly jump—the biggest one-week surge since the energy crisis in the summer of 2023, as the Middle East war has cut off 20% of global LNG supply.
The implied volatility in the Dutch TTF Natural Gas Futures, the benchmark for Europe’s gas trading, has surged fourfold since the beginning of the year and is at the highest in nearly three years, according to data compiled by Bloomberg.
Early on Friday, the April 2026 TTF futures contract was slightly down by 0.6% at $58.42 (50.425 euros) per megawatt-hour (MWh) at 9:10 a.m. in Amsterdam. Prices were on track for a 50% weekly jump and compare to $37 (32 euros) per MWh last Friday, just before the start of the Iran war that effectively closed the Strait of Hormuz, through which 20% of global LNG flows pass.
The benchmark European gas price soared this week after Qatar announced it is halting LNG production at Ras Laffan, the world’s biggest liquefaction complex, issued force majeure notices to customers, and the Strait of Hormuz became inaccessible for tanker traffic.
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With Qatar, the world’s second-biggest LNG exporter, second only behind the U.S., out of the LNG supply market for the time being, concerns intensified in Europe and Asia about gas supply and procurement for the rest of the winter season. Officially, this heating season ends on March 31, but Europe will need a lot of cargoes to arrive in the spring and summer to refill the gas storage sites that have been depleted to the lowest level in years.
A total of 85% of Qatar’s LNG exports go to Asia, so the immediate physical supply crunch is skewed toward Asia.
Europe has typically received about 12% of Qatari LNG—a much smaller share compared to Asia’s exposure.
However, the repercussions of a supply squeeze in Asia are huge for Europe, too, as Europe currently loses the competition with Asia for alternative spot supply as the Asian premiums over European prices soar and arbitrage is giving the strongest signal for traders to send LNG cargoes to Asia since the end of 2022.
By Tsvetana Paraskova for Oilprice.com
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