BAKU, Azerbaijan, October 16. Global natural
gas price benchmarks rose sharply in the third quarter of 2026 amid
the collapse of agreements between the U.S. and Iran to end the
conflict and resume commercial shipping through the Strait of
Hormuz.
According to the Quarterly Gas Market Review by the Oxford
Institute for Energy Studies (OIES), in the absence of diplomatic
progress, near-term natural gas futures could exceed $30 per
million British thermal units as March 2027 approaches.
According to the report, in the second quarter of 2026, prices
at the Dutch TTF gas hub mostly ranged from $13.50 to $17.50 per
million British thermal units, or 40 to 50 euros per
megawatt-hour.
“However, following the cessation of indirect contacts between
the U.S. and Iran and the resumption of military hostilities by
both sides, prices began to rise again. In mid-September, TTF
futures with the nearest delivery date reached a new high of $28
per million British thermal units (83.53 euros per megawatt-hour),
surpassing the previous peak of $21 (61.85 euros per megawatt-hour)
recorded in mid-March.
In the second half of September, gas prices for delivery to
Europe and Asia fell slightly, but the market remains sensitive to
changes in the situation.
The rate at which European gas storage facilities are being
filled is not sufficient to reach historical averages. This makes
the European gas market vulnerable to prolonged periods of low
temperatures and a reduction in electricity generation from
renewable sources, particularly due to a decline in wind power
production this coming winter,” the OIES report states.
According to the institute’s assessment, the lack of a stable
political agreement and prospects for the resumption of liquefied
natural gas (LNG) supplies from the Persian Gulf countries before
the start of winter could lead to further price increases.
“Market dynamics will also be influenced by winter demand,
increased LNG production capacity in the U.S., supply volumes from
existing U.S. projects, domestic gas production in Europe, and
pipeline imports,” the report notes.
At the same time, the OIES points out that high prices are
already leading to a decline in demand in Europe and developing
Asian countries.
“A full resumption of LNG shipments from Qatar, should a
breakthrough be reached in resolving the situation surrounding the
Strait of Hormuz, could trigger a sharp drop in price benchmarks,”
the report states.
