Europe Faces Winter With Gas Storage at Two-Decade Low as LNG Supply Tightens
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Europe enters winter with gas storage at 63% capacity, the lowest for this time of year in nearly two decades, according to Gas Infrastructure Europe. The war in Iran has crippled Qatari LNG supply through the Strait of Hormuz, pushing European benchmark gas prices to multi-month highs and LNG prices to a three-year peak. The Netherlands has become the first EU member state to warn it will miss its storage target.
Key Facts
- European gas storage is 63% full, the lowest level for this time of year in nearly two decades and well below the five-year average.
- The war in Iran has trapped Qatari LNG cargoes behind the Strait of Hormuz, slashing global LNG supply and pushing European benchmark prices to multi-month highs.
- The Netherlands is the first EU member state to warn it will miss its gas storage target ahead of winter.
- Europe now consumes 10-15% less natural gas than in 2021 due to higher renewables share and industrial adaptation to tight markets.
Storage Crisis
Current storage levels are about 63% full, data from Gas Infrastructure Europe shows. That is the lowest level for this time of year in nearly two decades and well below the five-year average. Europe risks missing its target for gas storage ahead of the winter, with the Netherlands becoming the first EU member state to warn it would miss its target.
Price Surge
The LNG squeeze and the uncertainty about supply prospects have had a direct and rather painful effect on gas prices. Front-month futures are higher than those further out in time, discouraging stockpiling for most of the summer. European benchmark prices have reached multi-month highs and LNG prices the highest in three years.
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Europe Faces Winter With Gas Storage at Two-Decade Low as LNG Supply Tightens
