Europe’s gas prices near Iran-conflict highs as winter storage crisis deepens

European natural gas prices have climbed sharply this week, approaching levels not seen since the onset of the Iran conflict earlier this year, as an extended outage at Norway's Ormen Lange gas field compounds a deepening storage crisis ahead of winter.

Benchmark Dutch TTF futures settled near €61 per megawatt hour on Wednesday, roughly double where they stood a year ago, according to Intercontinental Exchange data cited by CNN. The price spike reflects a confluence of supply disruptions that has left the continent increasingly exposed as peak heating season approaches.cnn

Norway's Ormen Lange Outage Extends Into 2027

Shell ↗ 0.61% cut production at Ormen Lange, one of Norway's largest gas fields, by roughly 40% after a compressor failure at one of its two subsea stations forced a shutdown on July 13. Output has dropped by about 8.9 million cubic meters per day from the field's 22.9 million cubic meter daily capacity, according to Norwegian infrastructure operator Gassco. The outage, initially expected to resolve by October, has now been extended to February 1, 2027.finance.yahoo+1

"Pushing the Ormen Lange outage to February is a big shift. We're losing key Norwegian baseload right in the middle of peak heating season," James O'Brien, head of LNG at D.Trading, told energy publication Montel.linkedin

Storage Shortfall Deepens

The production cut arrives as EU gas storage levels sit at roughly 59% — well below the seasonal average and comparable to levels seen during the summer of 2021, when Russia began restricting exports. Europe entered the 2026 injection season with its lowest stored gas since 2018, at just 31 billion cubic meters, according to Columbia University's Center on Global Energy Policy.energypolicy.columbia+1

ING analysts have flagged the slowing pace of storage injections as a mounting risk, noting that competition from Asian buyers for scarce LNG cargoes is making it harder for European importers to secure supply. The Strait of Hormuz remains largely closed due to the Iran conflict, obstructing roughly one-fifth of global LNG supply. Remaining cargoes, including from the United States, are increasingly being diverted to Asia, where buyers are willing to pay higher prices.cnn+2

A Winter of Uncertainty

The gas market pressures compound broader economic strains across Europe. Record-low water levels on the Rhine have disrupted industrial supply chains, with BASF warning it may struggle to fulfill some chemical orders. Meanwhile, consecutive heatwaves have forced nuclear power curtailments in Romania, France, and Hungary, further tightening energy supply.insurancejournal+1

Kieran Tompkins, a senior climate and commodities economist at Capital Economics, warned in a recent note that "the EU natural gas market is vulnerable as we look toward peak winter demand. Storage levels are the lowest for this time of year in over a decade".cnn

Not all analysts share the same level of alarm. Massimo Di Odoardo, vice president of gas and LNG research at Wood Mackenzie, told CNN that fears of shortages are "overstated," arguing Europe has the capacity to "buy itself out" of a crisis — though he cautioned that prices could reach extreme levels if the Strait of Hormuz does not reopen before winter.cnn