EU Faces Winter Gas Shortage as LNG Flows to Asia

The European Union is racing against time to refill its gas storage facilities before winter. According to energy market intelligence company Montel, the bloc's 90% storage target is now effectively out of reach due to liquefied natural gas (LNG) exports from the Gulf being increasingly diverted to Asia.

With natural gas supplies expected to tighten due to the war against Iran and the effective closure of the Strait of Hormuz, which accounts for roughly 20% of the world's gas transit, the European Commission had allowed EU countries to refill storage levels below 90%, in a bid to prevent panic buying and ballooning prices.

Despite these flexibilities, which could go as low as 75%, European gas storage stood at just 5% full at the end of July, around 12 percentage points lower than last year and 16 percentage points below the five-year average, according to Montel.