EU Gas Storage Hits Record Lows Amid Iran War and Russia Sanctions

The European Union is facing a severe gas shortage as storage levels hit record lows, prompting traders to anticipate soaring prices amidst the ongoing Iran war and Brussels's efforts to phase out Russian energy.

EU gas stocks are currently at around 64%, significantly lower than the 80% average maintained during this season over the past several years, according to ENTSOG. German storage is only slightly above 50% capacity, while the Netherlands and Belgium have levels of approximately 45% and 50%, respectively.

Natural gas prices have risen above $66 per megawatt-hour, more than double from earlier this year, as the market becomes increasingly exposed to cold weather, low wind generation, and unforeseen supply disruptions. Bjarne Schieldrop, chief commodities analyst at SEB, stated that 'no one expects' the Strait of Hormuz traffic normalization, leading to a 'winter panic' in the European natural gas market.