EU Gas Storage Levels Plummet Amid Capped LNG Supply

The European Union's gas storage levels have dropped to their lowest mid-August level in five years, falling to 60.8% full on August 17. This is down from 73.6% a year earlier, according to Gas Infrastructure Europe (GIE) data.

Analysts anticipate that the bloc will not meet its winter target of 90% by November 1, with estimates ranging from 75% to 77%. The lower storage levels come amid expectations that liquefied natural gas (LNG) supply from the Middle East will remain capped until April 2027.

Ole Dramhal, senior analyst at Rystad Energy Gas and LNG Markets, expects EU storage to reach about 75% by November 1 in his base case, while Ronald Pinto, principal insight analyst at Kpler LNG and Natural Gas, expects levels to reach about 77%. To reach 80%, Europe would need around 5.2 billion cubic meters (bcm) of additional gas compared with their base case.

The Strait of Hormuz remains an important route for global LNG trade, particularly for Qatari exports. Disruptions to shipping through the strait have affected Qatari LNG flows and intensified competition for spot LNG cargoes, with Europe and Asia competing for available supply.