The natural gas market in June continued to be affected by the Iran-US conflict in the Strait of Hormuz, which began in late February and significantly disrupted global liquefied natural gas (LNG) trade. Around one-fifth of the world's LNG volumes typically pass through this strait, including a significant share of Qatar's exports.
The TTF gas price in June fluctuated between EUR 40.53/MWh and EUR 50.28/MWh, averaging EUR 47.23/MWh. This was significantly lower than during the March-April crisis peak, when prices had increased by more than 60% within a month following attacks on Qatar's Ras Laffan LNG complex, but remained considerably above the price level seen before the conflict began.
What influenced natural gas price levels?
Shipping through the Strait of Hormuz remained significantly restricted throughout the spring. Even after the US-Iran ceasefire agreement reached in June, shipping flows have been recovering slowly and remain below pre-conflict levels.
European gas storage levels remain lower than in previous years, while injection rates in May and June were also relatively weak, creating additional pressure ahead of the autumn heating season.
Analysts estimate that the full restoration of shipping routes, including mine clearance operations, could take approximately 30 days, while Qatar may require around two months after the full reopening of the Strait of Hormuz to restore its LNG production capacity.
Natural gas price outlook for the coming weeks
There are currently no immediate supply risks. Suppliers have planned gas volumes for the upcoming heating season in advance and on a long-term basis, including LNG deliveries through Finland's Inkoo and Lithuania's Klaipėda terminals since spring.
However, the elevated TTF price level indicates that increases in heating and natural gas tariffs are expected in autumn, while industry representatives consider a precise price forecast for the upcoming heating season premature at this stage.
If geopolitical tensions persist or the conflict escalates again, approaching the heating season and with increasing natural gas demand, prices could continue to rise.
Currently, the average TTF price for July deliveries stands at EUR 45.03/MWh, while August delivery prices are forming close to the EUR 48/MWh level.
Overall, June was a challenging month for energy markets. Electricity prices in the Baltics continued to rise due to reduced generation and transmission constraints, while the natural gas market remains influenced by geopolitical tensions in the Middle East, although the situation has become more moderate compared to the peak of the crisis in spring.
