European natural gas prices surged to their highest levels in nearly four years, driven by mounting concerns over supply ahead of the winter heating season and ongoing disruptions stemming from the Iran war. The Dutch TTF front-month contract, a key benchmark for European gas trading, briefly surpassed €97.50 ($108) per megawatt-hour on Monday before settling near €96.63.

Although current prices remain below the extreme peaks seen during the 2022 energy crisis, they represent the highest levels since late that year. The market’s upward pressure reflects fears over tightening supply amid colder weather forecasts and persistent logistical disruptions impacting global liquefied natural gas (LNG) flows.

A significant factor contributing to the supply squeeze is shipping disruptions in the Strait of Hormuz, a critical chokepoint that historically accounted for roughly 20% of global LNG shipments. These disturbances have curbed exports from major suppliers Qatar and the United Arab Emirates, which primarily direct their LNG cargoes to Asian markets. As a result, Asia and Europe are competing more intensely for an increasingly limited volume of LNG ahead of the winter months.

Analysts at ANZ expect Europe’s LNG imports to fall about 11% below last year’s levels by the end of October. While experts do not currently anticipate a direct shortage of gas in Europe, the heightened competition for cargoes is likely to push prices higher and contribute to increased costs for consumers.

Compounding supply worries are concerns over European gas storage. As of Sunday, storage facilities across the European Union were reported to be 74.6% full, markedly below the historical average for this time of year. After several weeks of injections into storage sites, inventories recorded their first net decline last Tuesday, though filling resumed shortly thereafter.

The outlook, however, remains uncertain as weather conditions take a critical role. Forecasters predict slower Arctic wind speeds during early November, which raises the likelihood of a cold snap in the latter half of the month. Martin Senior, head of European LNG pricing at Argus Media, noted that such a scenario could accelerate gas withdrawals from already below-average stockpiles, potentially straining supply before the typical injection season ends.

The intersection of geopolitical tension, reduced LNG flows, and an increasingly volatile climate forecast has intensified European energy market stresses. While shortages are not imminent, the complex dynamics suggest a challenging winter ahead for gas markets and consumers alike.