Natural gas prices in the European market have sharply decreased following the decisive victory of the Democrats in the U.S. midterm elections. On Thursday morning, the gas price at the Title Transfer Facility (TTF) in the Netherlands, the main benchmark for gas trading in Europe, reached €86.14 (equivalent to $96.87) per megawatt-hour, indicating a 2.2% decrease compared to the previous day.
The Impact of the Democrats' Victory on the Gas Market
This price drop is part of a downward trend that began on Wednesday and generally reflects market optimism about the possibility of a diplomatic resolution to the tensions surrounding the Iran war. The price has now reached its lowest level in the past two weeks and is significantly lower than its four-year high of over €101.82 ($114) last week.
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Last week, the European benchmark price exceeded €100 for the first time since 2022. This price increase followed the disruption of gas supplies from Russia to European customers due to the Ukraine war. As Europe approaches winter, gas supply is extremely vulnerable, as LNG flows from Qatar have dwindled, and Qatar Energy has also extended the force majeure status for deliveries until the end of December 2026.
Expectations for Changes in U.S. Oil Policies
The Republicans' defeat in the midterm elections and Vice President JD Vance's acknowledgment that the Iran war was a factor in this defeat have raised market hopes. Analysts believe that President Donald Trump may shift his policies toward Iran towards diplomacy, which could lead to an increase in liquefied natural gas (LNG) flows from the Persian Gulf.
ING commodity analysts Warren Patterson and Eva Mohanty noted in a memo: "How we navigate after winter will depend on the recovery we see in LNG flows from the Persian Gulf this winter. Additionally, given market conditions, the weather situation in winter will become particularly important." This suggests that during the cold season, gas supply for Europe will become one of the main challenges.
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