Natural Gas: Risk premium sustained on Gulf disruptions – Rabobank
Rabobank’s Florence Schmit highlights that TTF Natural Gas remains supported by low European storage and disrupted Gulf LNG flows. The absence of meaningful U.S.-Iran progress keeps a structural risk premium in prices, with 2026 TTF seen averaging €60/MWh in Q4.
Florence Schmit from Rabobank notes that TTF Natural Gas prices are maintained by limited European storage and interference in Gulf LNG shipments. The lack of substantial U.S.-Iranian progress fuels a persistent risk premium in prices, with a projected average of €60/MWh for 2026 TTF in Q4. For 2027, the base case stands at €42/MWh, but infrastructure damage could drive TTF prices to a €50–60/MWh range.
The main concern for gas markets is not a single vessel passing through Hormuz but whether negotiations can establish a stable framework to resume Qatari LNG exports consistently. Until meaningful U.S.-Iran discussions take place, there will be no significant increase in Gulf LNG flows. The intermittent cargo movement will keep Europe competing for marginal Atlantic supply while storage levels remain low and winter demand approaches, leading to elevated European natural gas prices.
A credible political agreement to restore shipping confidence is necessary to eliminate the structural risk premium from TTF. Rabobank's base case for 2027 remains €42/MWh, while infrastructure damage that hampers the recovery in flows could cause TTF to trade between €50–60/MWh throughout the year.
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