European gas prices moved close to €70/MWh at the end of August after escalating conflict in the Middle East raised concerns about Persian Gulf LNG supplies. The same developments also increased competition risk between European and Asian buyers.
Front-month Dutch TTF traded around €69.90/MWh, up 4.4% from the previous close, reaching its highest level since January 2023, according to the daily market report. The move followed renewed military escalation in the Gulf region, with particular concern focused on potential disruption to Qatar and other LNG-exporting states.
Gulf escalation and implications for flexible LNG cargoes
A sustained reduction in Gulf LNG availability would tighten the pool of flexible cargoes available to buyers. That would also increase pressure on European importers to compete more aggressively with Asian counterparts for remaining supply.
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.
Weather outlook and sensitivity during storage build
Near-term weather is expected to provide some relief for demand. Cooler conditions expected in early September should reduce power-sector and household gas demand compared with the previous heatwave period.
Gas markets are still likely to remain highly responsive to geopolitical developments. Europe is entering the final part of its winter storage-building period without the inventory cushion seen in some previous years.
Impact on Southeast Europe power pricing
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 raises the likelihood that gas plants continue setting expensive evening power prices.
The effect would extend across Hungary, Romania, Greece and neighbouring markets as dispatch costs remain linked to prevailing gas and carbon levels.
