The EU’s gas reserves are emptier than at this stage of any autumn since 2011, meaning the bloc might have to burn 14 billion cubic metres (bcm) less gas than last winter over the coming months, according to the Institute for Energy Economics and Financial Analysis (IEEFA), a US-based non-profit that analyses energy markets and backs a shift to cleaner energy.
In a report published on Friday, IEEFA noted that EU gas storage sites were about 72.4% full on 3 October and could supply 7.3bcm less gas this winter, from November to March, than they did last winter.
Combined with the EU’s complete ban on Russian liquefied natural gas (LNG) imports from January 2027, the storage shortfall means the bloc may need to use 7% less gas than last winter.
“This does not mean EU gas storage will run dry this winter,” the report said. However, emptier sites release gas more slowly, which could leave the bloc short in a late-winter cold spell, and a depleted system would need a bigger and pricier refill next summer.
Plugging the storage gap with extra imports instead of cutting demand would cost about €3 billion, IEEFA estimates, a 12% premium on what that volume would have cost last year, as the US-Iran war has lifted prices.
“An increased reliance on gas storage has become a major financial liability for Europe,” the think tank concluded.
War drives up prices
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 for about a fifth of the global LNG trade.
Dutch TTF futures, the benchmark for gas prices in Europe, hit €84.5 per megawatt-hour in mid-September, the highest since 2022, the year Russia’s invasion of Ukraine began.
They crossed €80 again on Thursday and were trading at around €78 early on Friday.
Since the end of February, imported fossil fuels have cost the EU an extra €100 billion “without a single molecule of energy in addition”, European Commission President Ursula von der Leyen said on Tuesday.
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.
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 gap has narrowed, and at times this year the 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, while 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 222bcm in 2021-22 to 185bcm in 2022-23, as prices soared and emergency savings kicked in, but has risen to around 200bcm 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, the think tank noted, citing Eurostat.
Rather than spending on more storage, which IEEFA warned “risks locking in fossil fuel infrastructure for decades”, it urged investment in renewables, heat pumps, industrial electrification and efficiency upgrades to curb the winter demand peaks that drain reserves.