Morgan Stanley has warned that Europe faces a sharply elevated risk of failing to refill gas storage sufficiently this summer after confirming long-term damage to two LNG mega-trains at Qatar's Ras Laffan terminal.
In a fresh analysis, the bank revised its central outlook to what it calls Scenario 4 - now projecting that Dutch TTF gas prices could hit €90/MWh over the summer months. Morgan Stanley notes that this outcome implies roughly 45% upside relative to the current forward curve.
Quantifying the impact
Analyst Charlotte Firkins describes the damage at Ras Laffan as equivalent to approximately 13 Mtpa, or about a 3% shock to global LNG supply for the next three-plus years. The bank says the disruption has to some degree decoupled gas price dynamics from developments in the Strait of Hormuz.
Morgan Stanley now anticipates a 15 Mt global LNG deficit in 2026. While the bank observes that European fundamentals remain relatively loose in the near term, it cautions that the risk to achieving summer storage fill levels has increased materially.
Mechanics of tighter summer markets
To secure adequate volumes for storage, Morgan Stanley argues that TTF will need to move to levels that attract spot LNG cargoes to Europe during the summer. The firm highlights that the next meaningful catalyst will be a rise in physical market tightness as summer approaches. In particular, the bank flags the potential for a rush to purchase LNG cargoes during June and July; such a scramble, it warns, could push TTF toward the €90/MWh scenario.
The analysis also suggests that European governments may once again need to subsidise storage capacity bookings to encourage higher storage fill if the market does not clear naturally.
Downside stretch and longer-term implications
Morgan Stanley cautions that if the Ras Laffan outage persists into June or beyond, gas prices could revisit the extreme ranges seen in 2022 - namely €100–200/MWh or higher. The bank has also revised its 2027 forecast upward to around €45/MWh, citing a tighter-for-longer outlook driven by the lost Qatari volumes and delays at Qatar's expansion projects.
This analysis reflects Morgan Stanley's reported assessment of supply disruptions, market mechanics, and the potential policy responses required to ensure European storage fills ahead of winter.