War with Iran and the Gas Crisis: 3 Energy Price Scenarios for 2026
Back at the beginning of 2026, market forecasts looked almost idyllic. The International Energy Agency cheerfully predicted a surplus in oil supply, and new LNG projects in the US and Qatar were expected to flood the market with cheap raw material. High CO2 prices combined with falling gas prices were pushing coal into a corner.
A few months passed, and nothing was left of those optimistic assumptions. Geopolitics once again served as a reminder that analytical forecasts on energy exchanges have an extremely short expiration date.
The escalation of the conflict in the Middle East pushed the issue of extraction into the background. Today, the market asks just one question: will the raw material physically reach the end consumer at all? With a key transit route accounting for 20% of global oil and gas supplies blocked, political decisions dictate terms on European exchanges.
The paralysis of the Strait of Hormuz drastically cut exports—in the third decade of July 2026, only a few commercial vessels pass through this route daily (compared to around 120 ships before February 28). Qatar, Bahrain, and Kuwait declared force majeure on LNG exports. A lack of storage capacity forced the temporary shutdown of some liquefaction units. The collapse of ceasefire talks and the spread of fighting to the Bab el-Mandeb strait mean that hopes for a swift return to normal before winter have simply vanished.
A few months passed, and nothing was left of those optimistic assumptions. Geopolitics once again served as a reminder that analytical forecasts on energy exchanges have an extremely short expiration date.
The escalation of the conflict in the Middle East pushed the issue of extraction into the background. Today, the market asks just one question: will the raw material physically reach the end consumer at all? With a key transit route accounting for 20% of global oil and gas supplies blocked, political decisions dictate terms on European exchanges.
The paralysis of the Strait of Hormuz drastically cut exports—in the third decade of July 2026, only a few commercial vessels pass through this route daily (compared to around 120 ships before February 28). Qatar, Bahrain, and Kuwait declared force majeure on LNG exports. A lack of storage capacity forced the temporary shutdown of some liquefaction units. The collapse of ceasefire talks and the spread of fighting to the Bab el-Mandeb strait mean that hopes for a swift return to normal before winter have simply vanished.
European Gas Market in the New Reality
Restricting exports from the Persian Gulf pushed prices up, but the market did not repeat the panic of 2022. The scale of the increases was limited by lessons learned from the previous crisis: expanding the supplier base, increasing LNG terminal import capacities, and launching new projects in the US and Canada, which replaced about 70% of the volumes lost in the Persian Gulf.
In the first half of 2026, US LNG exports posted a record result—22.5% higher than a year earlier. Over the same period, exports from Qatar collapsed by more than 60%.
However, there are two major catches. Most of the new export projects have already been launched, and further investments will come online much slower. If disruptions in the Persian Gulf persist into the winter, the supply buffer capable of replacing lost LNG will simply run dry.
Norway as the Second Pillar of the European Gas Market
After Russian supplies were cut off, Norway took on the burden of balancing Europe. However, its capacity to further increase production remains severely limited. To make matters worse, late-summer maintenance work slashes fuel availability precisely when the market should be building up winter reserves.
A shrinking safety margin means one thing: exchanges will continuously factor in an elevated risk premium—especially if maintenance overruns and autumn turns out colder than average.
Europe Rebuilds Gas Reserves Under Tougher Conditions Than Last Year
We enter the second half of the year with lower storage fill levels than in 2023–2025. With a depleted buffer, even a minor shift in supply or demand will trigger immediate, aggressive price reactions.
The price structure itself does not favor rebuilding reserves either. The narrow spread between day-ahead gas prices (SPOT) and next-quarter contracts squeezes storage margins, making gas injection economically unattractive.
The price structure itself does not favor rebuilding reserves either. The narrow spread between day-ahead gas prices (SPOT) and next-quarter contracts squeezes storage margins, making gas injection economically unattractive.
Against this backdrop, Poland looks relatively solid—our storage facilities are around 80% full. At full capacity, this covers approximately 60 days of average consumption or 30–40 days during peak winter demand. That is a critical safety buffer, but let's not kid ourselves: domestic reserves will not isolate us from market madness across the rest of Europe.
Europe Competes with Asia for LNG Supplies Again
Before the conflict, 90% of LNG from the Persian Gulf flowed to Asia. Cutting off those deliveries forced Asian buyers to search for alternatives and bid up prices. In June 2026, the Asian benchmark JKM hovered around 4 USD/MMBtu above its European counterpart, TTF.
The result? Europe's share of US LNG exports fell below 50% for the first time in two years, as uncontracted vessels simply sailed wherever buyers offered more.
The result? Europe's share of US LNG exports fell below 50% for the first time in two years, as uncontracted vessels simply sailed wherever buyers offered more.
Gas Remains a Key Fuel for European Power Generation
In many European countries—especially Italy, Germany, and Spain—gas-fired power plants continue to balance the entire energy grid.
Every spike in gas prices instantly translates into more expensive electricity. The rapid growth of renewable energy reduced fuel consumption but did not eliminate its role. In autumn and winter, with shorter daylight hours and unpredictable wind patterns, the role of gas as a backup fuel expands rapidly.
Three Scenarios Ahead of the Heating Season
The coming months will bring high volatility. It all comes down to three possible outcomes:
- Bullish Scenario (Further Escalation): Continued blockade of Hormuz, attacks on critical infrastructure, or maintenance delays in Norway. Combined with a cold autumn and low wind generation, power and gas prices hit multi-month highs.
- Stabilization Scenario (State of Uncertainty): Supplies from the US and Norway flow steadily, Qatar gradually restores exports, and storage is progressively refilled. Prices remain elevated due to the risk premium, but sharp spikes are kept at bay.
- Bearish Scenario (Easing Tensions): A lasting truce in the Middle East, unblocking of the Strait of Hormuz, and the return of LNG cargoes. High supply and a mild autumn visibly lift price pressure.
What Does This Mean for Energy Consumers?
The course of the winter hinges on geopolitics, weather conditions, and supply chain resilience. One thing is certain: the old market model no longer works.
Purchasing energy based on last year's exchange charts or waiting for the market to "calm down on its own" is the most expensive strategy available today. Companies that know how to read market signals and translate them into proactive buying decisions will hold the edge.
At Enerace, we take the guessing out of this process. We combine raw commodity market analytics with purchasing automation, delivering strategies tailored to your plant's operational realities.
Purchasing energy based on last year's exchange charts or waiting for the market to "calm down on its own" is the most expensive strategy available today. Companies that know how to read market signals and translate them into proactive buying decisions will hold the edge.
At Enerace, we take the guessing out of this process. We combine raw commodity market analytics with purchasing automation, delivering strategies tailored to your plant's operational realities.
What do you gain?
- Budget protection against price spikes: We break purchases into tranches and deploy automated price-limit orders, protecting your margins from geopolitical turmoil.
- No more buying at peak panic: We monitor the market 24/7 and enter positions strictly when genuine price windows open up.
- Executive transparency: You receive clear calculations, reports, and economic rationales for every procurement decision made.
Stop guessing what your energy will cost this winter
Let’s talk about your current portfolio and see how we can secure your power and gas contracts ahead of the upcoming season.
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Author: Wojciech Nowotnik, Consultant
