Tuesday, 27 October 2026
European natural gas prices increased sharply during the third quarter of 2026 as restrictions on Middle Eastern energy exports placed renewed pressure on international supply markets. The latest research from Kamco Invest indicates that European gas prices averaged USD 21.5 per million British thermal units (MMBtu) during the quarter, compared with USD 11.3 a year earlier, representing an increase of 90.6%. The rise presents additional challenges for European businesses already managing energy expenditure, operating costs and investment decisions.
The increase follows prolonged disruption to shipping through the Strait of Hormuz, a major international route for liquefied natural gas exports. According to the October 2026 market assessment, the conflict involving the United States and Iran has significantly restricted shipments from Qatar and the United Arab Emirates, affecting a region that previously accounted for approximately one-fifth of global LNG supplies. The resulting reduction in available shipments has intensified competition among importers in Europe and Asia, with buyers seeking alternative sources to meet domestic energy requirements.
European gas prices reached USD 25.4 per MMBtu in September 2026, an increase of 128.6% compared with the same month last year, according to World Bank figures cited by Kamco Invest. Additional pressure came from maintenance affecting Norwegian production, weaker renewable electricity generation and relatively limited European gas inventories. These developments have increased concerns about energy costs ahead of the winter heating season, when demand from households, businesses and electricity generators typically strengthens.
The disruption has also affected international LNG trade. Global imports declined by 5.3% year on year to 127.8 billion cubic metres during the third quarter, while Qatar’s exports fell to approximately 4.6 billion cubic metres from 25.4 billion cubic metres a year earlier. European net LNG imports decreased by 12.8% to 28.7 billion cubic metres, prompting buyers to increase their reliance on American LNG, Norwegian pipeline deliveries and alternative energy sources.
Despite higher prices, European gas consumption declined only moderately. Research attributed to the Gas Exporting Countries Forum indicates that demand across the European Union fell by 0.9% to 51.8 billion cubic metres during the third quarter. Gas-fired electricity generation nevertheless increased during the period, reflecting the continuing importance of natural gas within Europe’s power supply system. The figures suggest that European energy markets remain exposed to international supply conditions even as efforts to diversify electricity generation continue.
The consequences extend beyond energy companies and utilities. Higher gas prices can increase the operating expenditure of commercial buildings, particularly properties dependent on gas-fired heating and energy-intensive building services. For office landlords, shopping centres, hotels and logistics operators, sustained price increases may place additional pressure on service charges and occupier budgets. The financial impact will depend on individual energy contracts, consumption patterns and the extent to which costs can be recovered from tenants.
Industrial occupiers face potentially greater exposure, especially manufacturers whose production processes require substantial quantities of heat or electricity. Higher energy expenditure can affect operating margins and influence decisions about production capacity, investment and the location of manufacturing facilities. For industrial property owners, energy efficiency, access to alternative power sources and the ability to accommodate on-site generation may consequently become more important considerations in discussions with existing and prospective tenants.
International production figures illustrate the scale of the supply disruption. Global natural gas output declined by 2.7% during the first eight months of 2026 to approximately 2,707 billion cubic metres, according to figures from the Gas Exporting Countries Forum cited in the report. Production losses in the Middle East were partly offset by increased output in North America, although additional supplies were insufficient to compensate fully for restrictions affecting the Gulf region.
The United States has continued expanding its role in international gas markets. American natural gas production increased during 2026, supported by additional export infrastructure and demand from overseas buyers. Kamco Invest, citing US Energy Information Administration projections, expects marketed production to reach an average of 112.2 billion cubic feet per day in 2026, rising to 116.1 billion cubic feet per day in 2027. However, additional American supply does not immediately eliminate the effects of transport constraints, international competition and differences between regional gas markets.
For European commercial property investors and developers, the renewed increase in energy prices adds another element of uncertainty to operating expenditure and project economics. Higher utility costs can affect occupier affordability, while prolonged energy market instability may strengthen demand for buildings with efficient heating systems, lower consumption and greater flexibility in energy procurement. With winter approaching and international supply conditions remaining uncertain, the direction of European gas prices will be an important factor for businesses assessing costs and investment commitments during the final months of 2026 and into 2027.
