Free speech and common sense

Natural gas/LNG: With Qatar's LNG production still largely offline and shipments through the Strait of Hormuz facing elevated risks, competition between Europe and Asia for available seaborne supplies continues to intensify. European benchmark gas prices have surged 250% year-to-date, while the Japan/Korea LNG marker has gained 237%, with both now trading well above USD 30 per MMBtu. In Europe, TTF futures briefly exceeded EUR 100 per MWh on Wednesday for the first time since 2022, reviving concerns about another damaging energy price shock. The latest surge reflects a combination of constrained global LNG supply, unusually low European inventories and growing uncertainty over weather-dependent winter heating demand. A slow rebuilding of storage levels during the summer has left Europe with a substantial supply deficit compared with recent years, equivalent to more than 100 standard-sized LNG carriers. This reduced buffer leaves the region particularly vulnerable to prolonged cold spells or further disruptions to global LNG flows, while forcing European buyers to compete more aggressively with Asian importers for flexible cargoes. The return to triple-digit gas prices is adding pressure on businesses, households and governments, raising the risk of renewed industrial demand destruction, and persistent inflation. With limited scope for a rapid recovery in Qatari exports, the market is increasingly dependent on demand adjustments and the ability of other LNG producers to redirect supply. Until the geopolitical outlook improves or European inventories recover, gas prices are likely to remain highly sensitive to weather forecasts, shipping disruptions and shifts in Asian demand.