ECB’s Schnabel calls energy price surge ‘quite concerning’

European Central Bank board member Isabel Schnabel on Monday called recent energy price developments "quite concerning," warning that the Middle East conflict has proved far more persistent than anticipated and poses mounting risks to Europe's economy as the continent heads into winter with historically low gas reserves.

Schnabel Flags Broad Price Pressures

Speaking at an event hosted by Germany's Federal Ministry for Economic Affairs in Berlin, Schnabel said the energy price threat extends well beyond crude oil to include refined products such as diesel and natural gas, which she noted has reached "a very high price level". She left the ECB's next policy moves open, saying future interest rate decisions would be "made on the basis of incoming data," following a rate hike the previous week.handelsblatt+1

European natural gas prices are at a four-year high, driven in part by a delayed start to storage refilling earlier this year. Countries had held off purchasing gas in hopes the Iran conflict would ease and prices would fall — a bet that did not pay off. With storage levels now well below historical averages, a rush to inject gas ahead of winter is pushing prices higher still.handelsblatt

Storage Deficit Deepens Winter Concerns

EU gas storage facilities are roughly 67% full, according to multiple tracking sources, running about 19 percentage points below the five-year seasonal norm. At the start of the summer injection season in April, average EU storage stood at just 28% capacity — the lowest since 2018. While injections have continued through the summer, the pace has not been enough to close the gap.azernews+3

Wood Mackenzie warned in July that European storage risked being below 70% ahead of winter, with spot gas prices already up more than 50% since mid-June. The World Bank in April forecast overall commodity prices to rise 16% in 2026, driven by soaring energy and fertilizer costs linked to the conflict.worldbank+1

Broader Economic Fallout

The energy squeeze is reverberating across Europe's economy. EU inflation is expected to reach 3.1% in 2026, according to a European Parliament briefing, with many member states already implementing emergency conservation measures or consumer support schemes. In Greece, heating oil prices could rise to around €1.80 per liter for the coming season, up roughly 60% from the previous winter, prompting the government to consider additional household support.europarl.europa+1

Schnabel's remarks underscore the ECB's dilemma: persistent energy-driven inflation may require further monetary tightening even as higher costs weigh on growth and household budgets across the eurozone.