Supply Risks Intensify
In 2025, the EU imported almost 38bcm of natural gas and LNG from Russia, equal to 12% of total EU gas and LNG imports. This included 20bcm of LNG and 18bcm of pipeline gas via Turkstream. LNG supply is a main risk because replacing flexible cargoes can be harder when the global market is tight. About 110bcm per year of Persian Gulf supply is currently affected, which reduces alternatives for Europe and can lift TTF in the near term. We are seeing significant upside risks building for European natural gas. The threat from Russia to redirect supplies away from the EU comes at a time when the global LNG market is already strained by ongoing disruptions in the Persian Gulf. Dutch TTF futures for the front month have already surged past €55/MWh in response to this news. This supply anxiety is amplified by our low inventory levels. Gas Infrastructure Europe data shows storage is currently at 29.5% full, a level dangerously similar to what we saw in early 2022. That tight supply situation back then preceded a period of extreme price hikes.Market Volatility Outlook
The potential loss of supply is substantial, considering we imported nearly 38 bcm from Russia in 2025. While replacing the 18 bcm of pipeline gas is a challenge, the real pressure point is the 20 bcm of LNG. Losing that volume in a global market already missing 110 bcm per year from the Persian Gulf creates a severe squeeze for buyers. For us in the derivatives market, this signals a period of heightened volatility and a clear upward bias for TTF prices in the coming weeks. Implied volatility on near-term options is spiking, making long call positions or call spreads attractive strategies to capture potential price surges. We remember how in early March 2022, with similar fundamental drivers, prices rocketed from around €80/MWh to over €200/MWh in just a matter of days. Create your live VT Markets account and start trading now.
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