Europe faces a natural-gas crunch as it faces the double whammy of low storage levels and no end in sight to Strait of Hormuz shipping disruptions.

The result: soaring prices for benchmark Dutch TTF natural gas, which settled yesterday at its highest level since January 2023, when the continent was still recovering from an energy shock sparked by the Ukraine war.

While the contract has slipped today, the risk of a further run-up remains in focus as Europe must refill depleted gas storage before winter sets in, ING analysts warn.

EU gas storage is just under 63% full, compared with average levels of 80% at this time of year, the Dutch bank said in a research note today. "At the current rate, it will be difficult for the EU to hit even the lower storage target of 75% ahead of the heating season. This raises the prospects of forced buying, increasing upside risk for gas prices," ING's analysts wrote.

The U.S. war with Iran has roiled the market for liquefied natural gas this year, as Iranian attacks damaged the world's largest LNG facility in Qatar and severely slowed shipments through the Strait of Hormuz.