Mild El Nino Scenario Still Leaves EU Gas Prices Vulnerable to 19% Rise
Analysts say mild El Nino conditions offer Europe's gas market limited protection when storage is at a two-decade low and Qatari LNG remains offline.
ICE Endex TTF front-month rose 4.46% to €69.77/MWh by 08:15 UTC on Tuesday (2026-09-01), with Montel reporting that analysts believe a mild El Nino winter would still leave European gas prices 19% higher.7
That move came as Europe enters the heating season in the weakest storage position it has held at this time of year since at least 2011. EU gas stocks stood at just under 58% of capacity, 12 percentage points below last year's level, according to Gas Infrastructure Europe data reported by Reuters on August 6 (2026-08-06).3
The European Union originally targeted 90% full storage by November. It has since lowered that to 80% by December, Reuters reported, explicitly to avoid a rush of pre-winter buying that would drive prices higher. Even the softer mark is in doubt: analysts say there is a real chance Europe will miss a flexible 75% floor by November 1 at the current injection pace, OilPrice.com reported on August 27 (2026-08-27).3,6
The shortfall traces to the closure of the Strait of Hormuz. War against Iran at the end of February (2026-02) closed the strait, removing roughly 20% of global LNG supply that Qatar typically provides, Reuters reported. European traders had counted on LNG to replace Russian pipeline gas lost since 2022, and the Hormuz disruption cut sharply into those volumes.3
Europe would need to raise LNG imports by approximately 15.15 million tonnes year-on-year through June 2027 to offset lower storage and reduced 2026 imports, OilPrice.com reported on August 14 (2026-08-14). That is a tall order while Asian buyers compete for the same spot cargoes. JKM, the Asian LNG benchmark, stood at $22.70/MMBtu on Tuesday (2026-09-01), sustaining the commercial pull of cargoes toward the Pacific.4
European buyers initially took a wait-and-see approach after Hormuz closed, Daily Sabah reported on August 18 (2026-08-18), but Qatari export disruptions and competition for non-Qatari spot volumes have since drawn them more actively into the market.5
The scale of the price risk rises sharply with weather. Analysts told Montel in the week of July 13 (2026-07-13) that prices could double to top €100/MWh if winter proves harsh, though they viewed physical shortages as unlikely. A combined scenario — no Qatari LNG and colder-than-normal conditions — could push the average day-ahead gas price to €110/MWh over the November-to-March period and leave storage only 10% full by end of March, Reuters reported.2,3
The mild El Nino case narrows that range, but ICIS said in June (2026-06-11) that European gas prices would need to rise regardless to attract US LNG away from Asia and refill stocks, with El Nino likely to intensify competition for cargoes rather than relieve it.1
David Lewis, senior research analyst at Wood Mackenzie, called Europe's low storage a "very risky situation," Reuters reported. Wood Mackenzie analysts said in late July (2026-07) that "Europe is approaching energy crisis territory." Trading Hub Europe M+1 gained 5.27% to €70.97/MWh on Tuesday (2026-09-01). The November 1 storage reading, against a target the EU has already cut once, is the next hard marker. Qatari cargo flows through the Strait of Hormuz have not resumed, and until they do, the distance between the mild-weather and the severe-weather price scenarios stays thin.3,6