Expert analysis
The geopolitical risk premium is fading fast, but it hasn’t disappeared yet
Over the past few days, the European gas market has been driven primarily by improving supply prospects.
- The front-month TTF contract has fallen to around €40.4/MWh, its lowest level in a week.
What’s behind the move?
- More LNG cargoes are transiting the Strait of Hormuz, while the US Energy Secretary said that oil and LNG flows are now approaching pre-war levels.
- Qatar aims to restore the majority of its LNG production within weeks, further improving global supply expectations.
- According to Arctic Securities, if the market were fully convinced that Qatari LNG supply would return quickly, TTF could already be trading closer to €35/MWh. This suggests that current prices still include several euros of geopolitical risk premium.
However, not everything is bearish.
- EU gas storage is currently 47.2% full, almost 15 percentage points below the five-year average for this stage of the injection season.
- At the same time, Asia’s cooling season is intensifying competition for LNG cargoes, while the ongoing European heatwave is increasing evening gas-fired power demand.
TotalEnergies also highlighted an important longer-term structural issue.
Europe is becoming increasingly dependent on US LNG imports. Although there are currently no signs of export restrictions — with Henry Hub trading at around €10/MWh versus approximately €40/MWh for TTF — a sharp spike in US gas prices could eventually prompt Washington to limit LNG exports in order to protect domestic consumers. While this remains a low-probability scenario today, it represents an important structural risk for Europe’s gas market.
What is the market watching now?
- The full normalisation of traffic through the Strait of Hormuz
- The recovery of Qatar’s LNG production
- The next steps in the US-Iran negotiations
- The pace of European gas storage injections during the summer
Bottom line: The short-term outlook remains bearish, as the market continues to unwind the geopolitical premium built into gas prices. However, below-average storage levels and strong global LNG competition mean that winter supply risks have by no means disappeared.
Analysis written by: Tóth Eszter Lilla
25.06.2026