The European Union's gas storage is emptier than at any autumn since 2011, raising the prospect that the bloc will need to cut consumption by 7% this winter, according to a new analysis from the Institute for Energy Economics and Financial Analysis (IEEFA). The US-based think tank, which tracks energy markets and advocates a shift away from fossil fuels, said on Friday that EU storage sites were about 72.4% full on 3 October, leaving 7.3 billion cubic metres (bcm) less gas available for the November-to-March heating season than last year.
That shortfall, combined with the EU's planned complete ban on Russian liquefied natural gas (LNG) imports from January 2027, means the bloc may have to use roughly 14 bcm less gas than last winter, IEEFA estimates. "This does not mean EU gas storage will run dry this winter," the report notes, but emptier sites release gas more slowly, which could leave the bloc vulnerable during a late-winter cold snap. A depleted system would also require a larger and more expensive refill next summer.
Costly imports or painful cuts
Plugging the storage gap with extra imports rather than cutting demand would cost about €3 billion, IEEFA calculates, a 12% premium over last year's prices, as the war between the US and Iran has lifted global gas costs. "An increased reliance on gas storage has become a major financial liability for Europe," the think tank concluded.
Europe's gas market has been under strain since the Iran war began on 28 February, disrupting shipping through the Strait of Hormuz, a route that carries about a fifth of global LNG trade. Dutch TTF futures, the benchmark for European gas prices, hit €84.5 per megawatt-hour in mid-September, the highest level since 2022, the year Russia invaded Ukraine. They crossed €80 again on Thursday and were trading near €78 early Friday.
European Commission President Ursula von der Leyen said on Tuesday that since the end of February, imported fossil fuels have cost the EU an extra €100 billion "without a single molecule of energy in addition." EU Energy Commissioner Dan Jørgensen urged governments last month to keep curbing demand amid "exceptionally low" storage levels, according to a letter seen by Euronews. Europe's gas grid operators also warned on Thursday that a severe winter could leave the bloc up to 15% short of the gas it needs, a risk highlighted in a separate report on potential shortfalls.
The storage business depends on gas costing less in summer than in winter, so traders can buy, hold, and sell at a profit. However, that price gap has narrowed, and at times this year summer contracts were dearer than winter ones. "Buying gas to store has become a financial risk rather than a profitable strategy," IEEFA said.
Governments are stepping in. The Hague cleared up to €993 million in June to help state-owned EBN build reserves, Germany told state-owned importer SEFE to store 8 terawatt-hours of gas by 15 December, and Spain has increased the LNG held at its import terminals by over 25%.
Winter gas use fell from about 222 bcm in 2021-22 to 185 bcm in 2022-23, as prices soared and emergency savings kicked in, but has risen to around 200 bcm in each of the last two winters, "suggesting the era of easy demand cuts may be over," IEEFA said. With imports flat, storage covered 30% of EU winter consumption last winter, up from 25% in 2021-22, according to Eurostat data cited by the think tank.
The warning comes as the EU also faces the challenge of Ukraine's frontline cities preparing for another winter under bombardment, and as the bloc's energy security strategy is complicated by the debate over excluding the UK from 'Made in EU' initiatives. With the January 2027 Russian LNG ban looming, the pressure on member states to diversify supplies and accelerate efficiency measures is only set to grow.
