Forex · Capitals Wire
– This is the script of CNBC's financial news report for China's CCTV on October 14, 2026. European natural gas futures have not yet reached the record peaks seen during the 2022 energy crisis triggered by the Russia-Ukraine conflict, when prices briefly touched 300 euros per megawatt-hour. However, compared with the start of the year, natural gas prices have surged more than 150%.
The primary driver behind this current rally is the ongoing escalation of geopolitical tensions in the Middle East. Prior to the US-Iran conflict, roughly one fifth of global liquefied natural gas supplies transited the Strait of Hormuz. Although LNG shipments through the strait have partially recovered since late September, volumes remain at roughly one quarter of pre-conflict levels, with the future supply outlook remaining uncertain.
At the same time, European natural gas storage inventories sit well below historical norms for this time of year. Data from Gas Infrastructure Europe indicates current storage levels stand at roughly 73%, significantly beneath the five-year average of 89%. Industry analysts suggest that, if a historical comparison must be made, 2021, on the eve of Europe's previous energy crisis, offers the closest parallel.
The European Commission stated on October 8 that while European natural gas reserves remain below historical averages, diversification of supply sources, expanded import capacity, and reduced overall demand will allow the European gas system to satisfy winter demand under baseline scenarios. However, industry analysts warn that this does not mean Europe has adequate emergency buffers. Gas storage facilities typically cover only 25% to 30% of winter consumption, leaving the remainder heavily dependent on continuous imports.
In the event of a severe winter or import bottlenecks, depressed storage levels not only narrow Europe's capacity to absorb supply shocks but also risk driving natural gas prices higher. CAROLE NAKHLE Chief Executive Officer Crystol Energy "You have a much bigger concentration of LNG exports in a small number of countries. So even a small disruption would have very big repercussions for global LNG trade because of this concentration." Because many retail energy contracts lock in fixed prices for set durations, rising wholesale gas prices will not immediately impact all households, though more consumers will face price pressures next year as contracts expire.
German price comparison portal Verivox reports that natural gas offers for new customers have climbed 55% year to date. Moreover, surging gas prices are forcing European power producers to reevaluate generation economics. Data from energy research firm ICIS shows that for the first time since at least 2024, coal-fired power generation has become more cost-effective than gas-fired generation.
Analysts project European coal-fired generation could expand by roughly one quarter over the next six months to offset declines in gas-fired output. SARA VAKHSHOURI Founder and President SVB Energy International "Europe is not worried about supplies, but more about prices. The story for Europe in this war so far and for the winter is going to be prices.
Repairing the infrastructure and returning to previous production levels is not that easy because of the complexity of LNG infrastructure. That might take a year or two, and would definitely have a longer-term impact on natural gas prices in Europe."
Source: CNBC
