European gas prices climbed to their highest level in more than three years at the end of August as renewed Middle East tensions raised the risk of disruption to LNG shipments from the Persian Gulf.
The front-month Dutch TTF contract traded at €69.90/MWh, up around 4.4% from the previous close of €66.97/MWh and its highest level since January 2023.
The move followed an escalation in regional hostilities, increasing market concern over shipping routes and LNG exports from major Gulf producers. Qatar is particularly important for European supply because any prolonged disruption to Qatari exports would reduce the number of flexible LNG cargoes available to both European and Asian buyers.
The timing leaves Europe exposed. EU gas storage was around 64.7% full, providing a smaller cushion than the market would normally prefer as the winter injection season moves into its final phase.
A loss of Gulf supply would likely force European buyers to bid more aggressively against Asian importers, supporting both spot LNG values and TTF contracts.
Weather provides some near-term relief. Milder conditions expected in early September should restrain gas demand, but the combination of relatively low inventories and geopolitical supply risk means prices are likely to remain highly reactive to developments affecting Persian Gulf exports.
The latest rally also strengthens the fuel-cost floor for gas-fired electricity generation, adding another bullish risk to European and SEE power markets heading into September.
