Slower Hormuz Export Ramp Leads Us to Raise Our Near-Term TTF Forecast

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Slower Hormuz Export Ramp Leads Us to Raise Our Near-Term TTF Forecast

Goldman Sachs Natural Gas Analyst

With our estimated tightness in winter gas balances in Europe leaving little room for

error, we expect that, for the remainder of this summer, TTF will price very close to the

65 EUR/MWh threshold (or above, for a bigger tightening shock) that we think destroys

Asia industrial demand for gas more visibly. Once winter starts to materialize, from

November, barring a colder-than-average shock, we expect that the TTF risk premium

will gradually moderate. On net, this leads us to raise our Bal3Q26/4Q26/2027 TTF

forecasts to 60/53/31 EUR/MWh from 41/40/30 EUR.

Risks to Our Near-Term TTF Forecast Remain Skewed to The Upside...

In a scenario where Middle East energy exports normalize only gradually through 2027,

we estimate that Dec26 TTF would likely need to move above 100 EUR/MWh

($35/mmBtu), 110% above our 50 EUR/MWh base case, to discourage Asia LNG

demand and manage European gas storage levels away from a stockout1. Importantly,

this upside to prices assumes 10-year average weather. Under a colder-than-average

winter, TTF would likely spike significantly more to destroy further demand and limit the

weather-driven incremental drawdown in gas storage.

In contrast, we estimate that a faster-than-expected ramp of Hormuz flows would allow

TTF to sell off back in line with the gas-to-coal switching threshold of 40 EUR/MWh, 20%

below our current Dec26 TTF price base case. A warmer-than-average winter would

likely remove the need for gas-to-coal switching, and hence the 40 EUR/MWh TTF floor,

potentially bringing forward the 30 EUR/MWh type of price we expect to see on average

in 2027.

As a result, we continue to recommend that gas users hedge their exposure to winter