Global Gas Markets Brace for Prolonged Supply Crunch

International Gas Union secretary general Menelaos Ydreos suggests that the market is already pricing in a prolonged conflict, driving Europe to aggressively outbid Asian buyers to secure necessary winter reserves. While high costs have triggered an immediate dip in consumption, the long-term impact remains uncertain as Southeast Asian nations continue to expand gas-fired power infrastructure and import capacity.

Goldman Sachs analysts have revised their winter price forecasts upward, now expecting an average of 70 euros per MWh—a sharp increase from previous estimates of 30 to 60 euros. Samantha Dart, co-head of Global Commodities Research at the bank, attributes this to the ongoing disruption in the Strait of Hormuz, where LNG exports remain at just 15% to 25% of pre-war levels. With gas becoming increasingly unaffordable, European utilities are pivoting back to coal, with consumption projected to climb by 25% over the coming half-year.

The regulatory landscape further complicates supply stability. As the European Union prepares to ban Russian LNG in January, it simultaneously pushes stringent methane tracking requirements that major suppliers like Qatar and the United States have resisted. Ydreos warns that if these mandates become overly burdensome, producers will simply redirect their product to more welcoming markets, leaving the EU with fewer options to balance its energy security against its climate agenda.