LNG Shift Unravels Europe's Gas Storage Strategy

For decades, Europe relied on buying gas when it was cheaper in the summer and storing it for higher prices during winter. However, this strategy has unraveled for the second year in a row due to the loss of steady Russian pipeline gas following the Ukraine war.

The continent's increased reliance on liquefied natural gas (LNG) supplies has led to concerns about a tight LNG market in 2025, causing summer prices to become more expensive at times. The Iran conflict has further exacerbated supply disruptions from the Middle East.

As a result, European traders have found it less feasible to inject gas into the continent's vast storage sites, which include depleted fields, aquifers, and old salt caverns. Consequently, inventories are at their lowest ever for this time of year, increasing the risk of larger price spikes during winter.