We have warned that Europe is approaching a twin energy crisis, with the Northern Hemisphere winter now just three months away.

Dutch front-month gas futures, Europe's benchmark contract, surged Monday morning to 67 euros per megawatt-hour, the highest level since early 2023.

Goldman Sachs commodities expert Samantha Dart warns that EU NatGas prices may need to more than double from her base-case forecast if LNG exports through the Strait of Hormuz remain constrained.

Dart said reduced Qatari LNG loadings have forced Europe to compete more aggressively with Asia for available cargoes.

"We have argued that, in the absence of an improvement in LNG exports through the Strait of Hormuz (SoH) (Exhibit 1), European gas prices (TTF) would need to rise to discourage Asia LNG demand, thereby freeing incremental cargoes to be sent to Europe to help manage European gas storage levels," she said.

Dart warned that the most alarming scenario would emerge if Persian Gulf energy exports recovered only gradually through 2027. Under that scenario, she estimates December 2026 TTF may need to exceed 100 euros per megawatt-hour, more than double the previous 50-euro base case, while Asian JKM prices could approach $35 per million British thermal units.

She noted, "However, because LNG prices have only been this high once, during the 2022 European energy crisis, our conviction in the scale of demand response at such price levels is low, and we would see it more as a price-discovery process."

Dart also pointed out that there "hasn't been enough yet to steady European gas storage injections, with Aug storage injections thus far widening the miss relative to our expectations."

Current NatGas storage levels for the energy-stricken continent stand at just 61.68%, well below the 15-year seasonal level of 72.5%.

The conflict in the Gulf area has severely constrained LNG flows to Europe, but it is not just the gas market that is constrained. The products market is also under pressure, as evidenced by the worsening diesel crisis.

On Monday, Treasury Secretary Scott Bessent held a press conference to announce the "single greatest financial offensive ever marshaled against an adversary."

There was good news over the weekend, as the newly opened, US military-supervised shipping corridor off Oman saw a 400% surge in commercial transits, raising further questions about whether Tehran's leverage over the Strait of Hormuz has eroded. TotalEnergies' CEO was quoted early Monday as saying crude is moving through the critical waterway "very quietly."