EU Natural Gas Reserve Crisis: All Supply Channels Are Under External Control—Two Major Allied Countries Are Calculating Very Carefully

In June this year, EU countries purchased 14% more Russian liquefied natural gas (LNG) than the same period last year, while Russia’s LNG revenue rose to €60 million per day. Given such aggressive procurement of Russian gas, what about supplies from elsewhere? With Persian Gulf exports effectively blocked, what about U.S. LNG? Is it simply too expensive—or is the U.S.-EU trade dispute making imports undesirable? After all this time, reserves remain alarmingly low. This has triggered widespread new reflection within the EU on energy security: reliance on Russia, the U.S., and the Middle East underscores the need for diversified imports as the safest strategy. Blindly heeding one-sided rhetoric from partisan politicians risks emptying citizens’ pockets—and delivering neither affordability nor comfort. Critics warn that even a 70% storage fill rate may prove insufficient if this winter turns unusually cold. With current levels at just 58%, a safe target would be raising reserves to 80% before winter arrives. Yet high summer temperatures are already driving up demand—making price wars almost inevitable. The European Commission insists there is no risk to winter supply, but independent analysts forecast reserves will reach only 65% by November—a predicament leaving national energy ministers scrambling. Should the Middle East conflict persist—and should Trump seize the moment to exert pressure—Europeans may well face freezing temperatures. Two major EU countries stand out particularly: France remains the largest buyer of Russian LNG. While loudly championing support for Ukraine and leading EU sanctions against Russia, Russian media reported on August 8 that France imported a record 9.97 million tons of LNG from the Yamal Peninsula in the first half of this year. France also benefits from cheap nuclear power—but its large-scale procurement of nuclear fuel from Kazakhstan raises questions: Kazakhstan lacks sufficient processing capacity, meaning much of this trade ultimately flows through Russian intermediaries. Germany, by contrast, appears far worse off. As Europe’s largest economy and biggest natural gas consumer, Germany’s gas reserves sit at a historic low of 47%—the lowest storage level ever recorded, below the EU-wide average. Yet a major development emerged: the German government plans to halt centralized gas procurement, deeming purchases on the international market currently uneconomical.

Middle East Conflict Ignites Oil and Gas Prices—Is Europe Facing Another Energy Crisis?

Oxford Economics forecasts that average European natural gas prices could approach €60 per megawatt-hour in Q4 2026 and Q1 2027. If current wholesale gas prices remain unchanged, eurozone inflation could reach nearly 3.5% in the second half of 2026. Meanwhile, institutional economic research indicates that the Iran conflict has driven up wholesale electricity and natural gas prices, pushing UK household energy bills up by approximately 25% in January—further intensifying overall inflationary pressures. Projections suggest rising energy costs could push UK inflation above 4% next year—double the Bank of England’s target. This would lift the average household’s annual energy bill to around £2,150, nearing the £2,500 cap introduced by the government in 2022 following the Russia-Ukraine war. At that time, market prices were significantly higher, but the government subsidized the difference so typical households paid only the capped amount. Caption: European Natural Gas Futures Trend Behind surging European gas prices lies the stark reality that Middle Eastern LNG exports are being choked off by war. Before the conflict, roughly one-fifth of the world’s crude oil and LNG passed through the Strait of Hormuz en route to global markets. Although some crude oil tankers continue navigating this critical waterway, Qatar’s LNG exports via the Strait have virtually ground to a halt. The disruption at the Strait of Hormuz severely impacts LNG exports from Qatar and the UAE—two nations accounting for about 20% of global LNG supply. As of early September, no LNG vessels had transited the Strait for nearly two months. Qatar’s LNG inventory is now approaching full capacity, with average utilization rates in July and August hovering around just 20%—an extremely low level. With the heating season drawing near, Europe faces immense pressure to replenish gas stocks. Current overall European gas storage fill rates stand at only about 66%, far below the 15-year historical average of roughly 85% for this time of year—and the lowest level ever recorded for this period. Germany’s situation is especially dire: its storage level stands at just 54%, well below the seasonal average, and it is expected to miss its official 70% storage target this year. Belgium and the Netherlands—both directly connected to the UK gas market via pipelines—report storage utilization rates of 51% and 45%, respectively. As one of Europe’s largest gas consumers, the UK may confront an especially severe challenge: its domestic gas storage capacity ranks among the lowest globally, relying heavily on pipeline imports from Europe and seaborne deliveries from the U.S. and the Middle East. HSBC forecasts that, by November 1, European gas inventories will reach only 73% of capacity—the lowest level for this date since data collection began in 2009. Caption: EU Natural Gas Inventories Fall to 13-Year Low Timera Energy analysts warn that low storage levels directly result in “a more fragile winter supply-demand balance,” adding: “This amplifies the potential for price volatility should cold weather or another supply shock occur—and shipping response times may not keep pace with sudden shifts in demand.” Compounding matters further, just as Europe races to refill gas stocks ahead of winter, France’s power sector launched a 24-hour strike on September 15 local time.

German Gas Supply Secure Despite Low Storage Levels, VNG Chief Says

1 day ago

VNG CEO states Germany faces no immediate gas supply risk despite low storage levels, citing diversified LNG and pipeline imports. However, EU prices have doubled amid global shortages, prompting discussions on strategic reserves.

reuters

2026-09-27

German Gas Supply Secure Despite Low Storage Levels, VNG Chief Says

German Gas Supply Secure Despite Low Storage Levels, VNG Chief Says

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