Citi sees European gas prices rising in 2027 as Middle East risks spur price gains

European natural gas prices could remain vulnerable to sharp increases in 2027 as markets weigh the risk of renewed conflict in the Middle East and potential damage to liquefied natural gas infrastructure, Citi analysts said.

The bank estimates that benchmark winter 2026-27 prices could reach €85 per megawatt-hour if the conflict escalates but liquefaction facilities remain unscathed. Prices could climb to around €154/MWh if LNG facilities are hit and taken out of service, Citi said.

Factoring in the probability of both scenarios, Citi estimates a weighted price of about €103/MWh in an escalation scenario, compared with the prevailing price of around €95/MWh at the time of its analysis. Without an escalation, prices could instead trade in a €60-€70/MWh range.

Citi said prices across the winter 2026-27, 2027 and 2028 contracts appeared to be reflecting similar probabilities of an escalation, alongside roughly a 25% chance of liquefaction facilities being struck.

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