European wholesale natural gas prices rose on Thursday as escalating attacks on commercial shipping in the Middle East heightened concerns about liquefied natural gas (LNG) deliveries, outweighing the impact of increasing European gas storage levels ahead of winter.
The benchmark Dutch front-month TTF natural gas contract gained 2.8% to €80.20 per megawatt-hour (MWh), while the equivalent UK wholesale gas contract advanced 3.0% to 199.40 pence per therm.
The increases followed reports from maritime security agencies of intensified drone and missile attacks targeting commercial tankers and energy vessels travelling through the Strait of Hormuz and the Red Sea.
The escalation renewed concerns about potential disruptions to international energy shipments, reversing the relative stability observed in European gas markets earlier in the week.
Higher war-risk insurance premiums and the possibility of LNG carriers being diverted onto alternative shipping routes have added to uncertainty surrounding European gas import schedules.
Changes to shipping routes could increase transportation costs and delay deliveries to European LNG terminals, particularly if security conditions deteriorate further.
LNG transportation faces additional logistical challenges because shipments depend on specialised vessels and dedicated import infrastructure. While some crude oil shipments have been redirected through alternative routes, analysts have warned that disruptions to LNG deliveries can take longer to resolve.
These concerns have contributed to renewed upward pressure on European wholesale gas prices as the region approaches its winter heating season.
European Gas Storage Reaches 72.83% Ahead of Winter
European underground gas storage facilities have continued to increase their inventories despite heightened uncertainty surrounding international energy supplies.
According to the latest figures from Gas Infrastructure Europe, natural gas storage across the European Union reached 72.83% of capacity, compared with approximately 66% a month earlier.
The increase reflects continued injections into storage facilities ahead of winter, providing an additional supply buffer during periods of higher demand.
However, current inventories remain below the levels recorded at the corresponding point last year, leaving European markets more exposed to potential supply interruptions or unexpectedly strong consumption.
Weather forecasts for northwestern Europe have also shifted towards lower temperatures, raising the possibility that demand for residential and commercial heating could increase earlier than previously expected.
An earlier start to the heating season could accelerate withdrawals from underground storage facilities, particularly if colder weather coincides with delays to LNG imports.
The combination of geopolitical supply risks, higher shipping costs and the prospect of increased winter demand continues to influence European gas prices, despite the improvement in storage levels over the past month.
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