European natural gas futures climbed above €36 per megawatt-hour, marking a fresh upswing as supply from Norway—the region’s top gas exporter—declined due to scheduled maintenance at the Kollsnes processing facility.
TTF prices rise amid Norwegian supply disruptions
The reduction in output from Kollsnes, a key hub for Norwegian gas exports, came at a sensitive time for European energy markets, which remain highly sensitive to supply-side disruptions. Norway accounted for roughly one-third of the EU’s natural gas imports in 2024, making any interruption in its supply chain a significant factor in market pricing and sentiment.
The maintenance comes as European traders and utilities are focused on restocking underground storage ahead of the 2025–26 winter heating season. Storage levels remain relatively healthy for early summer, but concerns persist about volatility in the months ahead, especially if unplanned outages or geopolitical shocks occur. The memory of past energy crises—particularly the 2022 supply crunch following the sharp decline in Russian pipeline gas—continues to influence market behavior, driving cautious procurement and price hedging strategies.
Geopolitical uncertainty also looms large over the market. Ongoing U.S.-EU trade tensions, including tariff escalations, could impact energy equipment and project timelines, while the unresolved war in Ukraine continues to threaten Eastern European pipeline transit routes. Any escalation in the conflict or further deterioration in Russia’s relations with the West could reintroduce supply risks that have largely been mitigated by diversification and LNG imports.
Subdued demand for LNG
On the supply side, one mitigating factor is the subdued demand for liquefied natural gas (LNG) in Asia, particularly in China, where economic growth has softened amid domestic challenges and a tepid post-pandemic recovery. This has allowed more LNG cargoes to be redirected toward Europe, helping to stabilize inventories and ease immediate summer supply pressures. However, market participants remain wary of competition from Asia intensifying later in the year, especially if industrial activity rebounds in China or if weather-related demand spikes in other parts of the world.
Overall, while short-term fundamentals appear balanced, the combination of planned supply reductions, storage rebuilds, and geopolitical friction is keeping upward pressure on European gas prices. Market volatility is likely to persist, with weather patterns, global LNG flows, and geopolitical developments all playing pivotal roles in shaping the path ahead for European energy security.
