Europe has been slow to pump gas into underground gas storage (UGS) during the spring months. Countries in the region face a “day of reckoning“ this winter, as energy prices may rise due to ongoing instability in the Middle East and increasing competition for limited fuel supplies, writes in its analytical material ag. Bloomberg.
European gas suppliers ended the 2025-2026 heating season with the lowest UGS reserves in four years. In late February, the United States and Israel started a war against Iran, which led to a reduction in oil and gas supplies from the Persian Gulf and a sharp rise in world prices. Against this backdrop, European traders have decided not to start buying new volumes of fuel immediately after the arrival of spring, but instead to wait for the resumption of shipping through the Strait of Hormuz after an agreement between the parties to the conflict.
“Nearly five months later, this gamble looks risky. Fighting in the Middle East has resumed, gas prices have reached their peak since the first weeks of the war, and Europe is lagging behind its usual schedule for storage capacity. Asian importers - from China to Pakistan - are buying up available volumes of liquefied natural gas (LNG) to replace lost imports from Qatar, effectively luring cargoes away from Europe“, the agency writes.
However, the authors of the article emphasize that “few doubt“ that Europe will eventually be able to purchase the necessary volumes of gas. The only remaining risk factor is the price the EU will have to pay for them. In particular, the question remains whether households and industry will be able to cope with another spike in heating and electricity bills just a few years after the region's last energy crisis. In addition, the agency suggests that governments in large EU countries, mainly Germany, could intervene in gas supply processes outside market mechanisms, which would only increase competition on the international market.
“All this time we have been like a frog in a boiling pot. The question is whether this frog can jump out, because prices are rising and rising quickly,“, Columbia University researcher Anne-Sophie Corbo told the agency.