​European gas prices had receded after the March rally that drove them to €60/MWh. But as of early August, the Strait of Hormuz is still not fully open, and there is no sign of a solution to the US-Iran conflict any time soon. In July, prices rallied again: delivered prices across Europe increased by 42% since 1 July.

Europe is entering the second half of the summer with ongoing supply problems and burning about 20% more gas for power generation than a year earlier, during ongoing heatwave conditions. Storage fill levels are at 59%, the lowest level for this point in the year in over 15 years. With an effective 80% storage fill level target before the winter and limited willingness from governments to intervene, the second half of the summer will continue to be tight. For batteries and renewable assets, higher gas prices tend to boost revenues. But the timing matters - do prices spike in summer or in winter?

Key takeaways