European natural gas prices have reached €90 per megawatt hour, hitting their highest level since December 2022. Limited supplies of liquefied natural gas (LNG) from the Persian Gulf are making it harder for the European Union to replenish its reserves ahead of winter.

European natural gas prices continue to rise as concerns over the security of energy shipments in the Middle East fuel fears of tighter supply on the global market. The development is putting additional pressure on Europe, which is seeking to strengthen its reserves ahead of the period of peak consumption.

European gas reserves have been rising steadily in recent weeks, reaching 74.47% of total capacity on 19 October. However, stocks remain below the levels normally expected at this time of year, limiting the safety margin ahead of the winter season.

Europe and Asia compete for LNG cargoes

Ongoing tensions in the Middle East and threats to maritime security are adding to uncertainty over energy supplies. Liquefied natural gas flows from the region remain around 80% lower than during the same period last year, restricting the volumes available on the global market.

This could intensify competition between Europe and Asia to secure LNG cargoes. The two regions are the world’s largest importers of liquefied natural gas and are expected to compete for larger volumes as winter approaches.

For Europe, the price outlook will depend largely on weather conditions, the trajectory of imports and how long supply disruptions persist. A colder-than-usual winter, combined with prolonged restrictions on energy flows, could trigger further sharp increases in prices.