As the Iran war has severely disrupted Qatari LNG supplies to Europe, sent gas and LNG prices in Europe and Asia skyrocketing, and heightened competition for the shrunk pool of readily available global LNG cargoes, Europe is heading for the 2026-2027 winter with one of its lowest levels of gas in storage in the past two decades, according to a report by OilPrice.com.
Europe’s gas storage is just 63 percent full, its lowest level for this time of the year in nearly two decades, according to data from Gas Infrastructure Europe. GIE said this is well below the five-year average for the bloc.
The major reason is the slashed global LNG supply with Qatar’s cargoes trapped behind the Strait of Hormuz, pushing European benchmark prices to multi-month highs and global LNG prices to the highest in three years.
Currently, the principal European gas and LNG trading benchmark is the Dutch Title Transfer Facility (TTF). Front-month TTF futures are currently trading at €65.00 to €69.00 per Megawatt-hour (MWh), equivalent to approximately $22.50–$23.50/MMBtu.
The high prices, with front-month futures higher than those further out in time, have discouraged stockpiling for most of the summer.
Global liquefied natural gas (LNG) prices are hovering near three-year highs, trading significantly higher than their levels three years ago (August 2023) due to acute geopolitical disruptions in the Middle East and severe shipping bottlenecks at the Strait of Hormuz.
In particular, there is fierce competition from Asia for LNG supply that does not need to move through the Strait of Hormuz, and Europe is currently losing the battle with Asia for scarce LNG cargoes, which is pushing TTF gas and northwest European LNG prices to their highest levels since 2023.
It is estimated that EU could miss even its flexible 75 percent November LNG storage target, raising the risk of forced winter buying, higher gas and electricity prices, and an even tougher refill challenge in 2027.
Energy analysts say Europe risks missing its target for gas storage ahead of the winter, with the Netherlands becoming the first EU member state to warn it would miss its target.
The current predicament translates that Europeans will once again wish for a milder winter as they have done in the past four years.
But there is now a perfect storm of heightened demand for filling depleted storage and electricity during the summer heatwaves, and slashed global LNG supply.
Energy experts say Europe does not have a choice, as it needs to fight for gas to fill storage sites to reasonably adequate levels before December, so as to avoid a winter supply crunch.
Indeed, earlier this year, policymakers and gas network operators in Europe knew they needed to step up spring and summer purchases to fill storage sites that were depleting fast in the cold of 2025/2026 winter.
However, the war in Iran forced the near-disappearance of Qatari LNG supply, which became such a a black swan event that no one could have predicted.
As a result, Europe was left shopping for supply amid high prices and intense competition for spot LNG supply from Asia, which itself was also scrambling for alternatives to the make up for Qatari supply that has not arrived in the past six months.
In addition, the Middle East war and the intensified competition from Asia came at a time European nations were trying to build in the spring and summer natural gas inventories for the next winter.
However, there is a silver lining in the dark cloud. The potentially mitigating factor is that Europe now consumes about 10-15 percent less natural gas than it did in 2021, due to a higher share of renewables for electricity generation and industries adapting from an abundance of gas (including from Russia) to tight markets with elevated prices.
Effect of high gas prices, higher energy bills
The LNG supply squeeze and the uncertainty about prospects of ever returning to status quo ante, have had a direct and painful effect on gas prices.
For instance, the European benchmark natural gas prices in Europe at the Dutch Title Transfer Facility (TTF) surged this August to the highest since 2023, and so did the LNG prices in northwest Europe. Same was gas supply was much more affected than oil flows at the mostly tightened Strait of Hormuz.
Gas value chain experts say these high prices could go even higher as winter approaches, and European nations are still struggling to build up sufficient inventories.
Warren Patterson and Ewa Manthey ING’s commodities strategists wrote in a note:
“At the current rate, it will be difficult for the EU to hit even the lower storage target of 75% ahead of the heating season. This raises the prospects of forced buying, increasing upside risk for gas prices,”
Also, analysts at Wood Mackenzie said at the end of July, “Europe is approaching energy crisis territory,”
Bill Farren-Price, a distinguished research fellow at the Oxford Institute for Energy Studies, wrote in an analysis in July: “Whichever pathway the Iran conflict takes, it now looks likely that European reliance on just-in-time LNG will be higher this winter – and the storage refill requirement an even steeper mountain to climb in summer 2027”.
Energy analysts say, Europe faces a winter [2026/2027] with the highest prices for gas and electricity in four years, with even higher gas needs next year for the next winter, unless LNG starts flowing out of the Strait of Hormuz very soon.
