Europe Heads for Winter Gas Shortage as Prices Soar

Europe is facing a gas deficit and low storage levels as it enters winter, following a reluctance to purchase gas due to high prices. The war between the US and Iran has contributed to the sharp rise in prices, while supply disruptions through the Strait of Hormuz have limited the availability of liquefied natural gas on the global market.

According to Bloomberg's estimates, Europe needs to inject an additional 100 TWh of gas to bring reserves up to at least 75 per cent. This would require a sharp increase in the rate of gas injection, not seen since the 2020 energy crisis. The cost of these additional purchases is estimated to be around €7 billion.

Go Katayama, Kpler's chief gas analyst, warns that gas prices in Europe could exceed €100 per MWh this winter. This would make European buyers more competitive than less affluent Asian countries, such as Pakistan and Bangladesh.