Gas hits €100/MWh as EU storage lags at 75%, NBP feels the pull

European wholesale gas touched €100/MWh this week, a level not seen since the depths of the post-Russia supply crisis in December 2022. Bloomberg reported that prices are now running at roughly three times pre-Iran war levels, and the move comes as the EU heads into winter with storage at just 75% of capacity, against 83% a year ago. For UK buyers, European gas sets the tone for NBP (National Balancing Point) pricing, so this is not a continental-only story.

The driver is physical disruption, not a demand shock. Reuters reported that fighting in Iran, Ukraine and Yemen has damaged refineries and disrupted shipping through the Black Sea, Red Sea and the Strait of Hormuz, three of the arteries that move oil and gas to European and Asian markets. EU Energy Commissioner Dan Jorgensen told reporters on Wednesday, 'We are in a very serious situation now. It does not appear we have a supply security issue, but I would caution against overlooking that.' He added that affordability matters as much as availability: supply is no use to households or businesses that cannot pay for it.

What this means for UK buyers

UK commercial contracts priced off NBP and European hub benchmarks are exposed to this move even though the policy response is being coordinated in Brussels, not London. Businesses renewing fixed contracts through the winter quarters should expect curves to reflect the current risk premium, not pre-crisis levels. Flexible and index-linked contracts will feel the €100/MWh print directly in coming settlement periods.

Several decision points are now in play for buyers watching their renewal calendar:

• European storage at 75% versus 83% last year, a tighter cushion heading into peak demand
• Disrupted shipping through the Strait of Hormuz, Black Sea and Red Sea, all feeding into landed LNG costs
• Western nations' agreement this month to release over 400 million barrels of emergency oil reserves, a move that may cap further escalation
• A European Commission proposal to cut electricity bills via lower tax rates on power relative to gas
• EU talks with refineries, started Wednesday, on relaxing technical requirements to lift output

The release of emergency oil reserves, agreed after US pressure, is the clearest sign governments are trying to get ahead of a winter price spiral rather than react to one. Whether that calms the oil side of the market enough to take pressure off gas is the open question; the two have moved together through this crisis, and refinery damage affects both.

The EU ministers' meeting on Thursday, and any detail on the electricity tax reform or coordinated demand curbs, is the next point that could move the curve either way. UK buyers with contracts up for renewal this winter should treat the current pricing as reflecting genuine supply risk, not speculative overshoot, and factor that into timing decisions over the coming weeks.