European Gas Price Hits Highest Level Since December 2022

European wholesale natural gas prices climbed above €86 per megawatt-hour on Tuesday, reaching their highest level since December 2022, as renewed violence in the Middle East and unusually low storage levels stoked fears about supply ahead of the winter heating season.

The benchmark Dutch TTF front-month contract rose more than 2% on the day to €86.15/MWh, according to the ICE Endex futures market. Gas has now become 18% more expensive in October alone, and prices have more than doubled compared with a year earlier.

A Familiar Milestone, New Drivers

The last time prices traded at comparable levels was December 2022, at the tail end of the energy crisis triggered by Russia’s full-scale invasion of Ukraine. But the drivers this time are different. As Belgian broadcaster VRT NWS reported, a new escalation of violence in the Middle East — including Houthi rebel attacks on Saudi Arabia — has increased uncertainty over supply from the Persian Gulf just as Europe’s heating season begins.

At the heart of the disruption is the Strait of Hormuz, the chokepoint through which a large share of the world’s liquefied natural gas and crude oil passes. With the strait effectively restricted, Europe’s LNG imports fell by almost 7% year-on-year, Global LNG Hub analysis shows, while subdued Norwegian and Russian pipeline deliveries — partly the result of annual maintenance — further squeezed availability.

Storage Running Well Below Normal

The supply crunch is colliding with a storage cushion that is thinner than usual. EU-wide underground gas storage stood at 72.2% on 2 October, down 13.3% from the same period a year earlier and 17.5% below the five-year average, according to Gas Infrastructure Europe’s AGSI+ data.

The east–west split is stark. France entered October with storage around 81% full, while Germany — Europe’s largest energy consumer — was at just 57%, and Belgium’s only storage facility at Loenhout held slightly more than 60%, down from nearly 94% a year earlier. European gas reserves normally cover about 30% of winter consumption.

On the demand side, gas-fired power generation in the EU grew by a striking 15% year-on-year amid subdued renewable output, adding further pressure to an already tight market.

Jorgensen Warns of a ‘Difficult Winter’

EU Energy Commissioner Dan Jorgensen has warned that the coming months could be worse than usual for vulnerable households. “In a normal winter, almost 50 million people in Europe cannot properly heat their homes. This winter could be even worse,” he said at a meeting of EU energy ministers in Dublin. “There is no doubt we are heading into a difficult winter.”

To ease pressure on industry, Jorgensen has proposed delaying the EU’s methane regulation by one year, a concession to a sector that argues the rules threaten supply security.

Policymakers have already moved to cushion the market. On 2 October, the G7 announced the coordinated release of up to 100 million barrels of crude oil and diesel from strategic reserves over four months, coordinated by the International Energy Agency. The 32 IEA member states subsequently agreed to release reserves faster than originally planned, prioritizing diesel.

The releases have offered only limited relief. Amin Nasser, chief executive of Saudi state oil company Aramco, warned that global inventories are “frighteningly low” and that the buffer to absorb supply disruptions is “dangerously small,” adding that it could take up to two years for stocks to be rebuilt even if the Strait of Hormuz fully reopens.

Spillover Into Transport Fuels

The gas spike is part of a broader energy-cost squeeze rippling through Europe’s transport sector. In Belgium, the maximum price of petrol 95 (E10) rose by 4 eurocents to €2.105 per litre on Tuesday — close to the late-September peak of €2.108, the highest since June 2022 — while diesel has hovered near record levels after hitting €2.501 per litre in September.

The political response has been cautious. Belgian Prime Minister Bart De Wever has resisted broad fuel-tax cuts, citing cost concerns and warning that “every economic and energy expert strongly advises government against remedying a supply crisis by stimulating demand.” Simulations suggest a €2-per-litre cap on diesel would cost the government roughly €200 million a month.

Why It Matters Beyond the Bill

Unlike the 2022 crisis, which was driven by a rapid pivot away from Russian pipeline gas, the current spike is a supply-side, geopolitically driven shock layered on top of structurally low storage. That combination makes it more persistent and harder to resolve quickly: even a de-escalation in the Middle East would not immediately rebuild inventories or reverse several months of underfilling.

Exposure is also asymmetric. Countries with fuller storage, such as France, are better insulated than Germany or Belgium, while energy-intensive industries across the bloc remain highly vulnerable to further price swings.

What to Watch

The immediate test comes next week, when a cold snap forecast across large parts of Europe is expected to lift heating demand. With a relatively thin storage cushion and a market still hostage to Middle East headlines, prices are likely to stay volatile — and elevated — through the winter.

Analysts at Global LNG Hub summed up the uncertainty: “The fundamentals seem to be pointing toward the bulls… but could the bears make a comeback?” For European households and businesses bracing for higher bills, the answer may not arrive soon.