Europe Heads Into Winter With Gas Storage at a Two-Decade Low
Europe is heading for the winter with one of the lowest levels of gas in storage in the past two decades as the war in the Middle East crippled LNG supply from Qatar, sent gas and LNG prices in Europe and Asia skyrocketing, and intensified competition for the shrunk pool of readily available global LNG cargoes. A perfect storm of elevated demand for filling depleted storage and electricity during the summer heatwaves, and slashed global LNG supply with Qatar’s cargoes trapped behind the Strait of Hormuz have pushed European benchmark prices to multi-month highs and LNG prices to the highest in three years.
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Key Facts
- Fact 1: One potentially mitigating factor is that Europe now consumes about 10-15% less natural gas than it did in 2021 due to a higher share of renewables for electricity generation and industries adapting from an abundance of gas (including from Russia) to tight markets with elevated prices.
- Fact 2: EU Gas in Storage Lowest in Years Early this year, European policymakers and gas network operators knew they needed to step up spring and summer purchases to fill storage sites that were depleting fast in the cold 2025/2026 winter.
- Fact 3: Current storage levels are about 63% full, data from Gas Infrastructure Europe shows.
- Fact 4: The European benchmark natural gas prices in Europe at the Dutch Title Transfer Facility (TTF) surged this month to the highest since 2023, and so did the LNG prices in northwest Europe, as gas supply was much more affected than oil flows at the mostly closed Strait of Hormuz.
Europe is heading for the winter with one of the lowest levels of gas in storage in the past two decades as the war in the Middle East crippled LNG supply from Qatar, sent gas and LNG prices in Europe and Asia skyrocketing, and intensified competition for the shrunk pool of readily available global LNG cargoes. A perfect storm of elevated demand for filling depleted storage and electricity during the summer heatwaves, and slashed global LNG supply with Qatar’s cargoes trapped behind the Strait of Hormuz have pushed European benchmark prices to multi-month highs and LNG prices to the highest in three years.
The high prices, with front-month futures higher than those further out in time, have discouraged stockpiling for most of the summer. But Europe doesn’t have a choice and needs to fight for gas to fill storage sites to reasonably adequate levels before December to avoid a winter supply crunch. That’s easier said than done.
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