Europe's heating season has begun with less gas in storage than at any point since 2013. In a report released on Tuesday, the International Energy Agency (IEA) said this will force the region to lean harder than usual on imported liquefied natural gas (LNG) over the coming months. The agency also sees the global gas market staying tight well into 2027.
As of October 31, EU sites were 75% full, the IEA said. A year earlier the figure was close to 83%, according to Gas Infrastructure Europe. The EU's old rule called for 90% by November 1. Looser rules set the bar at 80% this year, and the bloc still came up short.
Two of the biggest storage markets are lower still. The IEA put Germany at 62% and the Netherlands at 66%. Germany missed its own legal target of 70% for November 1, though the government said on Monday it expects supplies to cover the winter.
How the tanks ended up low
Europe began the summer from a weak position. Last winter drained EU storage to 28% of capacity, according to ACER, the EU agency that coordinates national energy regulators. The low point a year before was 34%.
Refilling then got off to a slow start. For much of the summer, gas for winter delivery traded below the spot price, so storing gas made little commercial sense. Many buyers also expected prices to ease once new LNG plants started up and Gulf cargoes came back.
The Gulf cargoes never came back. With LNG tankers still largely unable to use the Strait of Hormuz, shipments out of Qatar and the UAE fell by over 60 billion cubic meters (bcm) from March to October compared with a year earlier. Across the whole refill season, the EU injected about 4% less gas than its five-year average, even though buying sped up from August. Berlin went as far as ordering SEFE, a state-owned company that controls roughly a quarter of German storage space, to buy more gas and put it underground.
Four ways the winter could go
The IEA ran four cases for how full EU storage could be at the end of March. Each depends on the weather and on when LNG starts moving through Hormuz again:
| LNG through Hormuz | Mild winter | Cold winter |
|---|---|---|
| Restarts in early January | 33% | 15% |
| Disrupted until end of March | 25% | 7% |
Both cold cases would leave storage at its lowest on record. In the worst one, stocks drop under 10% by early March.
The level matters for more than the headline number. Pressure falls as a storage site empties, so it can send out less gas each day. The IEA says that slowdown usually starts below 30% full. A late cold snap would arrive just as Europe's ability to respond is at its weakest.
Europe and Asia want the same cargoes
No other region that imports LNG has storage on Europe's scale. EU sites can hold about 100 bcm, close to 30% of the bloc's yearly gas use, so Europe usually absorbs the swings in the world market. This winter it will be bidding for the same flexible cargoes as buyers in Asia and South America, who have little storage of their own.
Prices already show the strain. Asian spot LNG cost close to 80% more from March to October than a year earlier, and Europe's benchmark TTF price was up almost 70%, according to the IEA. At Wednesday's prices, gas at the Dutch TTF hub cost roughly 10 times as much as at Henry Hub, the US benchmark.
The pressure may not end with the winter. Over the past five years, the EU has injected 50 bcm in an average summer. Depending on what is left in March, it would need 57 to 83 bcm in 2027 to be back at normal levels by November, the IEA estimates.
Supply losses will also run for years. The IEA puts total LNG losses from 2026 through 2030 at about 150 bcm, partly because of damage at Ras Laffan in Qatar, the biggest LNG export plant in the world. This year's drop in global LNG supply, about 3%, would be the largest on record.
What it means for the US
American LNG is filling much of the gap. US cargoes made up more than 60% of Europe's LNG deliveries from January to September, the IEA said, and ACER puts the US share of the EU's total gas supply this summer at about 30%. Asia is leaning on the same supply. Its purchases of Atlantic Basin LNG, most of it American, were twice as high from March to October as a year earlier.
That demand has not pushed up prices at home. US storage is in line with its five-year average, the IEA expects US output to grow close to 4% this year, and Henry Hub is about a third lower than a year ago on our data.
What to watch
- Hormuz. Two of the IEA's cases assume LNG starts moving through the strait in early January. QatarEnergy has extended force majeure, which lets it skip deliveries it cannot make, for most buyers through December. On Tuesday, Iran said the latest US reply to its conditions for reopening the strait was not convincing.
- Weather. A cold January or February would pull storage down fast.
- Russian LNG. The EU bans Russian LNG bought under long-term contracts from January 1. Russia supplied 13% of Europe's LNG over the first three quarters, so those cargoes will need replacing.