With war disrupting supplies, Europe's gas storage facilities are nearly empty

The war in the Middle East has caught Europe at a time when its gas storage facilities are almost empty after winter. This summer, it will have to buy more liquefied natural gas (LNG) to refill them, while competing with Asia for a smaller pool of available supplies. Bloomberg reported this today. For example, the Netherlands’ storage facilities were just six percent full at the start of this week, according to data from Gas Infrastructure Europe (GIE). That is the lowest level for this time of year since the end of 2010.

In Germany, which has the largest storage capacity in the European Union, stocks are also much lower than usual, currently at around 22 percent. The Czech Republic’s storage facilities are around 29 percent full. The EU-wide average is about 28 percent, the lowest for this time of year since 2022.

Gas storage across the continent is now in the spotlight because the war in Iran has restricted global supplies and pushed up prices. EU Energy Commissioner Dan Jörgensen has urged member states to start filling their storage facilities in good time, avoiding a scramble for supplies that could drive prices even higher this summer. He also said national governments should lower their storage-filling targets to 80 percent while making full use of the flexibility offered by EU law.

Seasonal price differences have so far made it uneconomic to fill storage facilities, but the situation is beginning to change. Reports of extensive damage to gas facilities in Qatar last week drove up prices for long-term gas supply contracts in Europe. This improved key seasonal price spreads, which are essential to encourage storage injections in summer.

Prices for European benchmark gas contracts have risen by more than 55 percent since the war began. The current war in the Middle East began on the last day of February with a US-Israeli attack on Iran.