European gas prices approached €70/MWh at the end of August as escalating conflict in the Middle East raised concerns over LNG supplies from the Persian Gulf and increased competition risk between European and Asian buyers.
Front-month Dutch TTF traded around €69.90/MWh, up 4.4% from the previous close and at its highest level since January 2023, according to the daily market report.
The price move followed renewed military escalation in the Gulf region, raising particular concern over potential disruption to Qatar and other LNG-exporting states.
Any sustained reduction in Gulf LNG availability would tighten the pool of flexible cargoes and force European buyers to compete more aggressively with Asian importers.
The risk is amplified by relatively weak European inventories. EU gas storage was around 64.7% full, leaving the market more dependent on continued LNG arrivals during the remainder of the injection season.
Near-term weather provides some relief. Cooler conditions expected in early September should reduce power-sector and household gas demand compared with the previous heatwave period.
But gas markets are likely to remain highly responsive to geopolitical developments because Europe enters the final part of its winter storage-building period without the inventory cushion seen in some previous years.
For SEE power markets, a sustained TTF price around or above €70/MWh would reinforce already-high gas-fired marginal generation costs. Combined with EU carbon prices above €80/t, this increases the probability that gas plants will continue setting expensive evening power prices across Hungary, Romania, Greece and neighbouring markets.
