The European Union could face a natural gas shortage at the start of winter unless it quickly secures replacements for lost supplies. The risk is raising concerns about higher electricity bills and possible measures to curb consumption.

A report by the Institute for Energy Economics and Financial Analysis (IEEFA) estimates that the bloc’s overall shortfall this winter could reach 14 billion cubic metres. That represents about 7% of EU demand and enough gas to generate electricity for between 10 million and 12 million European households. The estimate comes as the war in Iran continues to disrupt global energy supplies.

The findings are supported by a report from the European Network of Transmission System Operators for Gas (ENTSOG), presented to national energy authorities. It warns that in a cold winter, with liquefied natural gas imports limited or even “optimal”, storage levels could fall to 11%. That is the level needed for strategic reserves, which cannot easily be used.

Natural gas is widely used to heat buildings, power industry and generate electricity. At the same time, EU storage stands at just over 70%, the lowest level for this point in the year since records began in 2011. High prices made it more attractive for traders to sell gas during the summer rather than store it for later winter use.

Gas prices have already reached almost a four-year high, while supply is constrained by the war in the Middle East. If the coming winter is as cold as the previous one, Europe will have limited options for securing additional volumes, IEEFA warns.

The risk does not necessarily mean that the bloc will run out of gas. However, it could have 7 billion cubic metres less stored fuel available. That could force countries to buy gas at high prices on increasingly volatile global markets, or require consumers to reduce demand if new supplies cannot be found.

The EU has a “smaller buffer” against disruptions in global supplies, making it “vulnerable to price spikes”, said Ana Galler-Macarewicz, IEEFA’s lead European energy analyst. If countries are forced to draw down their reserves this year, they will also have more to refill next year, she said, extending the cycle of low storage and higher prices.

To restore storage to 30% by the end of winter and reduce vulnerability during future cold periods, countries may have to restrict or withhold volumes equal to 7% of demand from consumers, ENTSOG warns.

Additional pressure will come from the EU-wide ban on long-term contracts for Russian liquefied natural gas, due to take effect in January. IEEFA estimates that the measure could reduce Europe’s gas imports by another 7 billion cubic metres. Russian gas has traditionally helped cover fluctuations in winter demand, while Europe now relies increasingly on its reserves.

Winter gas demand has risen slightly over the past two years, while imports into the bloc have remained at similar levels. As a result, the EU has relied more heavily on storage during winter. Net withdrawals reached 22.6 billion cubic metres in January this year, compared with 18.8 billion cubic metres in January 2025 and 17.8 billion cubic metres in January 2024.

One alternative is to import additional liquefied natural gas by sea, increasingly from the United States. At current prices, replacing the lost volumes would cost European consumers an extra 3 billion euros, or 12% more than the same volume would have cost last year. US LNG production is also close to full capacity, which would further restrict available supply, Galler-Macarewicz said.

ENTSOG’s tight-market scenario allows for a global deficit in which available LNG imports to Europe fall by 20%. Laurent Ruseckas, a senior gas market analyst at S&P Global Energy, said storage may fall only to a certain level because rapid depletion early in winter would push prices higher and attract supplies to Europe from Asia.

Source: 24chasa.bg