The reopening of the Strait of Hormuz may ease immediate concerns around global energy supplies, but ICIS analysis suggests markets remain exposed to significant geopolitical and supply chain risks. While Brent crude and Dutch TTF gas both surged during the conflict, European gas proved considerably more volatile, reflecting its greater sensitivity to LNG supply disruptions. As a result, ICIS explains in a recent analysis that TTF is expected to remain the more reactive market as uncertainty persists.
Europe now faces mounting pressure to rebuild gas storage ahead of winter, with inventories at their lowest level since 2021. To meet EU storage targets, the region will need to secure around 150 additional LNG cargoes by November, leaving it vulnerable to global competition for supply. Key risks include:
- Increased LNG demand from Asia, particularly if El Niño drives higher cooling demand.
- Continued disruption to Middle Eastern LNG exports or shipping.
- Slower than expected gas storage injections, increasing upward pressure on European gas prices.
For oil markets, the outlook is more balanced. Although the reopening of Hormuz should support a gradual recovery in crude flows, damaged infrastructure, elevated shipping costs and the need to rebuild depleted inventories are expected to keep prices above pre conflict levels. However, weaker fuel demand and rising non OPEC+ production are likely to limit further gains. ICIS concludes that, while volatility will remain a defining feature of both markets, European gas currently presents the greater upside risk, making the relationship between TTF gas and Brent crude a key market to watch over the coming months.
