In the first week of October 2024, TTF gas futures on the ICE market continued the upward trend observed in the previous week. On October 2, these futures dipped by 1.7% to a weekly low of €38.62/MWh. However, prices rebounded throughout the week, peaking on Friday, October 4, at €40.98/MWh—an increase of 7.5% from the previous Friday and the highest price recorded since August 27.
The rise in natural gas prices was largely influenced by ongoing strikes and conflicts in the Middle East. Iran’s missile attacks on Israel and the subsequent threat of retaliation heightened concerns about potential disruptions to regional gas supplies. This geopolitical tension drove Dutch TTF gas prices above €40/MWh as fears of interruptions to critical oil and gas infrastructure grew. Analysts cautioned that the situation could trigger further price spikes, especially with rising demand as winter approaches.
European and Asian natural gas prices climbed on September 30, following Israeli military actions in Lebanon and Yemen. The TTF index gained for a fourth consecutive session, rising 5% the previous week to reach €39.044/MWh.
On Tuesday, October 1, European gas prices rose 1% to €39.273/MWh after Iran’s significant missile strikes against Israel, which reportedly targeted gas platforms near Ashkelon. Chevron, a major operator in the region, temporarily halted operations at the Leviathan and Tamar gas platforms for precautionary reasons.
By mid-week, natural gas futures had declined slightly to €38.617/MWh, but they rallied again on October 4, exceeding €40/MWh and reaching €40.980/MWh.
The uptick in European natural gas prices reflects fears that escalating tensions in the Middle East could jeopardize vital supply routes. Attention is now focused on Israel’s potential responses to Iran’s attacks, with worries that an all-out conflict could threaten offshore gas fields supplying Egypt and Jordan.
In Ukraine, concerns remain high about potential supply disruptions following President Volodymyr Zelensky’s warning that Russia might target nuclear facilities.
As of the latest update, the one-month forward contract at TTF was trading at €38.830/MWh. Any impact on Israel’s gas infrastructure due to broader conflicts could have regional ramifications. Israel has become a significant gas producer, reaching record production levels of 24.7 bcm in 2023. In the first half of 2024, output rose by 7% year-on-year to 13.1 bcm, indicating a trajectory for record production.
Israel’s gas is sourced from three offshore fields: Tamar, Leviathan, and the newly operational Karish. The Karish platform supplies gas domestically via an 8 bcm/year capacity FPSO. Following the October 7 attacks, the Israeli government ordered the temporary closure of the Tamar platform, which resumed operations a month later.
Lebanon, lacking its own gas production, relies on fuel imports for electricity generation. Analysts predict increased demand and higher natural gas prices this winter as colder weather sets in. However, uncertainty looms over Europe, particularly with the anticipated end of Russian pipeline flows via Ukraine and the potential for broader regional conflict impacting liquefied natural gas supplies. The United States remains Europe’s largest LNG supplier in recent years.
