Europe gas storage hits 20-year seasonal low amid LNG supply disruptions

Europe is facing a significant energy security risk as gas storage levels enter the winter season at approximately 63 percent capacity, a figure well below the five-year average of roughly 80 percent. This low storage level is driven by geopolitical disruptions in the Middle East, specifically the Iran war, which has caused shipping bottlenecks at the Strait of Hormuz.

QatarEnergy has extended its force majeure on liquefied natural gas (LNG) deliveries through October or early November due to the inability to transit through the Strait of Hormuz. Unlike crude oil, LNG cannot be easily transferred via ship-to-ship methods to bypass the blockade. This supply disruption has triggered a surge in global energy prices. In Europe, the Dutch Title Transfer Facility (TTF) benchmark has seen prices rise toward €69 per megawatt-hour, while spot LNG prices in Asia have reached four-year highs.

Competition for remaining global cargoes is intensifying, with Asian utilities frequently outbidding European buyers. Analysts warn that Europe may struggle to meet its 75 percent storage target for November, increasing the risk of forced winter buying and higher electricity costs.