EU gas storage hits record low as LNG crisis deepens ahead of winter

Europe is entering the winter heating season with gas storage at its lowest level in over two decades, as disrupted LNG flows from the Middle East and intensifying global competition for scarce cargoes raise the prospect of sharply higher energy prices in the months ahead.

EU gas storage stood at roughly 66 percent full in early September, well below the five-year average of around 83 percent for this point in the refill season. According to CNBC, the shortfall has raised the risk that competition with Asia for supplies could push European gas prices above 100 euros per megawatt-hour for the first time since the 2022 energy crisis. East Asian spot LNG prices are already at their highest since Russia curtailed gas supplies to Europe four years ago.thenationalnews+2

Gulf Disruptions Tighten Global Supply

The crisis traces largely to the ongoing conflict in the Middle East. Qatar's LNG plants at Ras Laffan — which supply a fifth of global LNG — sustained damage from Iranian attacks, with 17 percent of capacity offline for several years. Unlike crude oil, LNG cannot be rerouted through bypass pipelines, and the economics of sailing vulnerable LNG carriers through the Strait of Hormuz are unfavorable: an LNG tanker costs roughly $240 million but carries only about $114 million worth of cargo at current prices.thenationalnews

QatarEnergy extended its force majeure on LNG shipments to Pakistan, Bangladesh, and Italy's Edison into early November. Bangladesh has paid $28.03 per million British thermal units for spot cargoes — equivalent to $163 per barrel of oil.thenationalnews

Shipping Fuel Squeeze Adds Pressure

The energy crunch extends beyond natural gas. Reuters reported that fuel oil used by ships and power plants faces a shortage of 218,000 barrels per day in the current quarter, according to Energy Aspects — the first such deficit since 2025. The International Energy Agency estimates that roughly a fifth of Middle Eastern refining capacity, totaling some 9.6 million barrels daily, has been knocked offline by hostilities. Ukrainian drone strikes on Russian refineries have further tightened diesel supply, prompting Russia to ban diesel exports.oilprice+1

With gasoline and diesel inventories at record lows, refiners globally are prioritizing those fuels at the expense of fuel oil production. "Record-low gasoline and diesel inventories will incentivise refiners globally to maximise secondary unit runs with more fuel oil feedstock barrels, in turn tightening fuel oil balances," Energy Aspects analyst Royston Huan told Reuters.oilprice

Britain Braces for Higher Bills

In the United Kingdom, Ofgem confirmed on August 26 that the domestic energy price cap will rise 4 percent from October, increasing annual bills by £60 to £1,723 for a typical household. With wholesale gas prices hitting a fresh three-year high, further increases of up to 10 percent in January are widely anticipated. New LNG capacity from the United States, Nigeria, and Canada is expected to ease the global supply picture from late 2027 onward, but for now, as The National's Robin Mills wrote, European policymakers are left "anxiously watching the barometer" as winter approaches.telegraph+3