Rabobank: LNG supply wave is coming, but not right now

what happened

Rabobank says European and Asian gas prices, tracked through the Dutch TTF and Asian JKM benchmarks, are near their highest level in about three years. The bank links the rally mainly to worries about disruption from Middle East tensions and the Russia-Ukraine conflict, not to an expected structural shortfall in future supply.

The bank points to low European gas storage, reduced Qatari shipments and risks to Strait of Hormuz shipping as reasons a large risk premium has built up. Further escalation could push prices even higher. Still, new LNG projects starting over the next few years should ease those concerns, and current volatility does not mean the market is permanently tight, Rabobank argues.

Energy strategist Joe DeLaura says the LNG supply increase expected before the war has been pushed back and changed in shape, but not cancelled. New liquefaction capacity outside the Gulf should gradually reduce dependence on Qatar and the premium Europe and Asia pay for spot cargoes. Rabobank forecasts TTF falling to €38-42 per MWh for much of 2027, with North America leading and projects in Canada, Nigeria and Russia adding to supply. Around 40 million tonnes per year of non-Qatari export capacity could reach markets next year, and another 50 million in 2028.

why it matters

For gas markets, the key point is that today's price level rests largely on a geopolitical risk premium. The bank sees new export capacity outside the Gulf gradually shrinking that premium, which matters for LNG exporters and for European storage planning.

market impact

TTF, JKM, LNG exporters: geopolitical risk premium supports prices, new capacity is a longer-term downward pressure.

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