European Gas Prices Soar Amid Storage Deficit and Geopolitical Tensions
European natural gas prices have reached their highest level since December 2022, peaking at €84/MWh in early-to-mid September 2026. The current storage deficit is a major concern as EU gas inventories sit at around 68% capacity, which is roughly 16 percentage points below the five-year seasonal average of 84%. This translates to approximately 74.5 billion cubic meters, about 14 billion cubic meters less than the same point last year and the lowest storage volume since 2013.
The shortage can be attributed to two main factors: geopolitical tensions affecting LNG flows through the Strait of Hormuz and routine maintenance work in Norway reducing pipeline gas supply. Qatar is a key flexible supplier, and any restriction on its shipments hits storage replenishment directly. Norway's reduced output creates outsized pressure on spot markets and storage injection rates.
European policymakers have introduced flexible storage targets that allow inventories to dip as low as 75% under difficult supply conditions. The European Commission also noted that demand across the bloc has fallen by roughly 17% compared to pre-crisis levels, reducing the risk of outright shortages at current storage levels. Prices hovering between €80 and €84/MWh are rationing existing demand and signaling to global LNG sellers that European terminals will pay a premium for cargoes.