Europe enters winter with gas storage at 71%, raising fears of supply shortages and higher prices

Europe is heading into the winter heating season with gas storage significantly below levels seen in recent years, leaving the region with a thinner supply cushion as demand rises. The S&P Global Energy report shows EU gas storage at about 71.3% full at the end of September, compared with 82.5% a year earlier and 94.2% in 2024.

The shortfall has increased the importance of additional gas purchases at a time when LNG and power prices are already elevated. Storage levels are also below the roughly 87% level considered typical for this point of the year, raising concerns about Europe’s ability to replenish inventories if winter demand accelerates.

The immediate challenge is how the region manages the gap. Europe can seek additional supplies in the international market, but that could come at higher prices. Alternatively, a colder-than-expected winter could put greater pressure on available inventories and increase the risk of supply shortages.

US LNG fills a growing share of Europe’s supply gap

The S&P Global Energy report expects LNG imports into the European Union and the UK to rise 6.5% in the fourth quarter to around 491 million cubic metres a day. US cargoes account for 62% of Europe's LNG imports so far this year, making the US the dominant supplier. Russia supplied 15%, while Nigeria accounted for 6%.

Russia's role is expected to decline further, with the fourth quarter marking its final period before the EU's planned ban on Russian LNG. At the same time, Norway remains a crucial source of pipeline gas, with flows of around 308 million cubic metres a day, according to the report.

Higher gas costs are feeding into power prices

The supply situation is already being reflected in energy markets. S&P Global Energy said European fourth-quarter power prices have reached their highest level since early 2023, while global LNG prices are at their highest since late 2022. Low hydro stocks and uncertainty over wind generation could add further pressure during periods of high electricity demand, potentially increasing the cost of power generation across the region.

Germany shifts storage responsibility to private companies

Germany's approach to storage has also come under scrutiny. The country has only recently moved towards placing greater responsibility for filling storage facilities on private companies. While private-sector purchases could help rebuild inventories, higher procurement costs could eventually feed into utility bills and industrial energy costs.

Europe is therefore facing a delicate trade-off. Buying more gas now could help strengthen its winter buffer but expose consumers and utilities to higher prices. Delaying purchases could leave the region more vulnerable if temperatures fall sharply or supplies are disrupted.

Winter risks extend beyond storage levels

The S&P Global Energy report identifies several risks for the fourth quarter, including LNG shipping through the Strait of Hormuz, competition with Asian buyers for cargoes, Russian LNG flows, Middle East conflicts and uncertainty over European weather and renewable power generation.

With storage entering winter well below recent norms, Europe's energy security will increasingly depend not only on how much gas it can secure, but also on prices, weather and the reliability of global LNG supplies.