Europe's Winter Energy Buffer at Record Low

Europe's energy buffer heading into winter is at its thinnest in 15 years. EU gas storage is currently around 66% full, down from a normal level of over 80%. Germany, which relies heavily on gas for heating and power generation, has storage levels just above 50%, far short of the government's target of 70% by early November.

The prolonged disruption to Qatari LNG exports through the Strait of Hormuz has reduced global LNG supply by roughly 20%. Qatar itself has exported only 18 LNG cargoes since the war began, compared with 509 during the same period last year. This shortage is likely to tighten the market and increase competition for alternative supplies.

The main risk facing Europe this winter is not an outright shortage of gas but rather a combination of low inventories, cold weather, weak wind and hydro generation, and continued Qatari disruption, which could sharply increase demand for gas-fired power at the same time as heating demand peaks.