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Europe faces winter energy risk as gas storage stays far too low

Gas in storage is only just above 50% full, a historically low level, as LNG supply issues and higher EU benchmark gas prices tighten availability.

Reported · Written up by our desk · Energy

OilPrice reports that Europe is heading into a difficult winter as tightening global oil and gas supply meets the continent’s heavy dependence on energy imports. The outlet cites both low natural gas storage levels and a diesel crunch that could threaten fuel oil supply security for the heating season.

The pressure began to build earlier in the year, OilPrice says, with warning signs emerging as early as March after the U.S. and Israeli campaign against Iran crippled Qatar’s LNG export infrastructure. Qatar was then forced to declare force majeure on exports, reducing one of the lower cost LNG options for Europe.

OilPrice adds that the EU largely stopped Russian pipeline gas imports after its Ukraine-related sanctions push, leaving it more reliant on LNG. It says the EU sources about 21% of its energy from natural gas and would need to turn more to US liquefied gas, which the article characterizes as expensive.

Citing Wood Mackenzie, OilPrice reports that the benchmark EU gas price is up 50% since mid-June, while gas storage is only just above 50% full, an historically low level for this time of year. It also says LNG imports into Europe are likely down even during the active storage refill season.

Latest closeNat gas $2.723 ▲2.3%

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