European gas prices have stabilized. Milder weather has reduced withdrawals from storage, and low withdrawal rates are likely to continue in the coming weeks. ECMWF two-week forecasts show temperatures well above the 30-year average.
The next priority is refilling gas storage for next winter. EU storage levels are described as very low, including in Germany. Earlier cold weather drove much higher demand and faster withdrawals than we have seen recently.
Risk Of Hormuz Disruption
Another risk is disruption to LNG shipping if tensions rise between the US and Iran. Around one-fifth of global LNG supplies pass through the Strait of Hormuz. The EU imports only limited LNG from Qatar: under 8% of total EU LNG imports last year and under 5% in January, based on Bruegel data.
If shipping through the strait is disrupted, global LNG supply could tighten. Competition for cargoes would likely increase, pushing prices higher. In that case, the TTF natural gas price could jump sharply.
For now, warmer forecasts across Europe are helping prices hold steady. This mild spell is slowing how fast storage is being used. EU gas storage is currently about 62% full, slightly below the 65% level seen at this time last year. That gap suggests the market is still tight underneath.
Even so, this stability may be fragile. It can also lead to complacency about geopolitical risks around the Strait of Hormuz. Any military escalation would tighten global LNG supply quickly, even if Europe’s direct imports from the region are small. The 2022 price shocks showed how fast global LNG competition can push European prices into triple digits.
Trading Implications And Positioning
This creates a potential setup for derivatives traders in the weeks ahead. With the market focused on mild near-term weather, implied volatility on TTF natural gas options has likely fallen. That can make upside protection cheaper. One approach is to buy out-of-the-money call options for the second quarter, aiming to benefit from a sharp spike while keeping the upfront cost limited.
Even if conflict is avoided, refilling storage for next winter remains a major challenge. Asian LNG demand has been rising, with January 2026 imports up 7% year-on-year. That increases competition for cargoes. This adds a second bullish argument for holding long exposure, since the injection season could start in a tight market.
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