Natural gas prices in Europe increased due to developments in the Middle East

In the Netherlands-based TTF, which is considered the reference in natural gas pricing in Europe, the megawatt-hour price of natural gas in October futures contracts ended Friday at 79.52 euros.

As of 09.59 today, prices increased by 5.6 percent compared to the closing time, reaching 83.96 euros.

The developments that threatened the energy supply in the Middle East were effective in the rise in prices. While Saudi Arabia temporarily closed the critically important East-West Oil Pipeline following attacks by unmanned aerial vehicles (UAVs), the advance of the Houthis in Yemen has increased concerns that there may be new disruptions in global energy supply.

On the other hand, the meeting planned to be held today to discuss a possible agreement between Iran and the Gulf countries to establish a temporary safe route in the Strait of Hormuz has been postponed.

Iranian Foreign Ministry Spokesperson Ismail Bekayi announced that a meeting would be held in Oman to determine a temporary safe route in the Strait of Hormuz. However, Bahrain stated that it would not attend any meeting attended by Iran.

The process of filling Europe's gas tanks continues

While Europe is trying to refill its natural gas tanks before winter, disruptions in LNG shipments from the Persian Gulf to Europe, especially from Qatar, are suppressing the region's supply outlook.

According to European Gas Infrastructure (GIE) data, the occupancy rate of natural gas tanks in European Union countries is at 68.04 percent.

Although the European Commission announced on September 8 that there is no immediate risk for natural gas supply security this winter, it is stated that prolonged disruptions in LNG supply from the Gulf countries may further tighten the global natural gas market.

In this case, buyers in Europe are expected to compete more intensely with consumers in Asia for LNG cargoes, creating additional upward pressure on prices.

According to news in the international press, strategists of the US-based financial services company Citigroup (Citi) state that the European economy and stock markets are more limitedly affected by the rise in natural gas prices compared to the energy crisis in 2022. However, persistently high natural gas prices could increase pressure on company profits and the economic outlook, especially in energy-intensive sectors.