EU entering winter with lowest gas reserves on record, IEA boss warns

Entering winter with low gas storage means the EU has less cushion if supplies fall or demand rises. Gas stocks usually reach about 90 percent before winter, but the EU is only 72 percent full.

That shortfall equals energy for roughly 10 to 12 million homes, according to analysts. If a harsh winter arrives, households, businesses, and power producers may compete for limited supplies. Europe also competes with Asian countries, which depend heavily on Middle Eastern energy.

The disruption is already serious because nearly one-tenth of Europe’s LNG passed through the Strait of Hormuz before the war. Iranian attacks have reduced those imports, while European gas prices have risen 140 percent since February. The International Energy Agency’s Fatih Birol says Europe may face higher LNG costs, even if peace returns quickly.

EU gas storage is only 72 percent full, compared with the usual 90 percent before winter. That gap represents enough energy to power about 10 to 12 million homes. Fatih Birol, the IEA chief, warned Europe cannot easily withstand another supply shock.

This matters because European households and businesses depend on imported gas for heating and electricity. With supplies disrupted through the Strait of Hormuz, Europe must compete with Asian countries for liquefied natural gas. Nearly one-tenth of Europe’s LNG previously passed through the strait.

The current shortfall leaves the bloc less prepared for cold weather. Analysts say a harsh winter could push European gas prices higher. Ministers are considering asking households and businesses to reduce consumption as supplies remain tight.

LNG is natural gas cooled into a liquid so it can travel by ship. It is useful when pipelines cannot supply distant customers. The Strait of Hormuz is a narrow sea passage linking Gulf energy producers with global markets.

Nearly a tenth of Europe’s LNG passed through the strait before the war. Iran’s attacks on vessels have sharply reduced imports, creating competition with Asian buyers who depend on Middle Eastern supplies.

Europe’s gas storage is now 72 percent full, versus a usual 90 percent. The shortfall equals energy for roughly 10–12 million homes. If winter is harsh, Europe may pay more for LNG, and households or businesses could face calls to ration use. Even a ceasefire would not instantly restore supplies, so disruption may raise costs into coming months.

European gas prices could rise because winter increases heating demand while available supplies remain unusually low. If shipping through the Strait of Hormuz stays disrupted, fewer gas cargoes may reach Europe. Europe must then compete with Asian buyers, pushing up costs.

Nearly one-tenth of Europe’s liquefied gas normally crossed Hormuz before the war. Iran’s attacks on vessels have sharply reduced imports, tightening the market. A harsh winter would make homes and industries use more gas. That could happen while deliveries remain uncertain, allowing sellers to charge more.

Europe’s storage was only 72 percent full, compared with the usual 90 percent, as winter began. The shortfall equals energy for 10 to 12 million homes. Birol warned prices may rise even if peace returns immediately, because rebuilding supplies and replacing lost shipments takes time.

Europe and Asia are competing for the same limited LNG cargoes because both regions rely heavily on Middle Eastern supplies. When Hormuz disruptions reduce shipments, buyers must bid against one another, pushing up prices even if fighting stops.

Nearly one-tenth of Europe’s LNG previously crossed the Strait of Hormuz. Iran’s attacks on vessels have cut imports. Asian countries are even more dependent on the Middle East, intensifying the contest for replacement cargoes.

Europe is especially exposed: storage is 72 percent full, against the usual 90 percent, as winter begins. The bloc also depends on imported gas for heating, power, and industry. A harsh winter could raise prices, strain households and businesses, and force rationing; Birol says difficulties may continue next year.

Europe can reduce exposure by expanding pipelines that bypass Hormuz, using nuclear power, switching fuels, and releasing emergency reserves. Each helps differently, but none quickly replaces lost supplies. Pipelines need time. Nuclear plants cannot restart instantly, and reserves last only months.

Middle Eastern countries are building or expanding bypass pipelines after Hormuz disruptions. Europe can also seek LNG elsewhere, but it competes with Asian buyers. Nearly one-tenth of Europe’s LNG previously crossed Hormuz. Nuclear power offers domestic electricity and reduces gas demand; Birol says Europe turned away from it too early.

Emergency oil and diesel reserves can soften shortages. A G7 release produced an immediate $20 oil-price drop. Gas storage is just 72 percent full, versus the usual 90 percent. Gas prices have risen 140 percent since February. Fuel switching or rationing could reduce demand, but harsh weather could still bring higher prices.

An energy disruption becomes a price crisis when available fuel cannot meet demand quickly. Storage provides a cushion, while supply routes, pipelines, ports, and refineries determine how fast replacement fuel can arrive. If demand remains high, shortages push buyers into competition and prices rise.

Europe shows this mechanism. Nearly one-tenth of its LNG normally crossed the Strait of Hormuz, but attacks on vessels sharply reduced imports. European buyers now compete with Asia, which depends even more on Middle Eastern supplies; limited routes and cargoes therefore make each replacement shipment more expensive.

Europe entered winter with gas storage 72 percent full, versus a usual 90 percent, leaving less protection against cold weather. Birol warned that a harsh winter could raise prices, while gas prices had already climbed 140 percent since February. Building alternate pipelines, maintaining refineries, and reducing demand can soften future shocks.