TTF October climbs to highest level since late 2022
European gas prices reached their highest level since 2022 as concerns grew around reduced shipping through the Strait of Hormuz. Prices also climbed to the highest point since late 2022 as Europe accelerated storage injections ahead of winter. The Dutch TTF October contract traded at €78.77/MWh on Sept. 9, up 3.9% from the previous close. It was the highest level since the second half of December 2022.
Hormuz traffic slows, Iran-US escalation cited
Commercial vessel traffic through Hormuz slowed sharply, averaging just 10 vessels per day crossing the strait over the previous 10 days. Data cited in the report put the rate at the lowest since May. The move in gas prices followed a further escalation involving Iran and the United States. The escalation raised concern that disruption to one of the world’s most important energy shipping routes could tighten international LNG availability.
Europe’s storage build increases sensitivity to LNG availability
The timing is particularly sensitive for Europe because utilities are trying to rebuild inventories ahead of the winter heating season. That effort creates additional demand for available cargoes. Any prolonged reduction in shipping through Hormuz would compete directly with Europe’s seasonal storage requirements. It could keep LNG and European hub prices elevated even before heating demand begins to rise materially.
Gas price moves feed into power market costs
Implications for European power markets extend beyond gas itself. At current gas prices, gas-fired generation becomes substantially more expensive. That increases the potential for sharp electricity price movements during periods when renewable supply is weak.
