Europe is depleting its natural gas reserves at the fastest rate in six years, as colder-than-usual winter weather and low temperatures complicate the continent’s transition away from fossil fuels.
Since the start of the official winter season on October 1, gas storage levels in the European Union (EU) and the UK have fallen by 83 terawatt-hours (TWh), energy analyst John Kemp reported last month. This marks the quickest rate of withdrawals since 2016, and the pace is more than four times faster than the average over the past decade. While gas reserves remain at relatively comfortable levels, they are noticeably lower than in the previous two winters.
Data from Gas Infrastructure Europe highlights the urgency. For example, Germany’s gas storage stood at 90.93% on November 30, yet withdrawals reached 831.6 TWh, significantly surpassing the 44.38 TWh injected. On that day, the country’s total gas consumption was 888.83 TWh.
Across the EU, storage was at 85.47% of capacity by November 30. Withdrawals totaled 4,364 TWh, while injections reached just 538 TWh. Consumption on that day amounted to 3,761 TWh, as solar power generation remained low and wind conditions were inconsistent. Although the period of low wind and solar output, known as “Dunkelflaute,” has passed, Germany continues to rely heavily on gas—and even more on coal.
The surge in gas demand has triggered concerns over rising prices. In November, the European gas benchmark, the Title Transfer Facility, averaged 47 euros per megawatt-hour (MWh)—a 16% increase from October. This rise follows a sharp dip earlier in the year, with prices falling to 25 euros per MWh in February, their lowest in three years.
A cold snap across the Atlantic, bringing sub-zero temperatures to both northwest Europe and the US Northeast, has further strained gas supplies, according to Quantum Commodity Intelligence. This chill, typical for winter, comes at a time when Europe’s energy policies have been tested by a combination of cold weather and reduced wind power.
Moreover, Europe faces the looming threat of losing the last supplies of Russian gas, which still flow through Ukraine. While EU officials have expressed a desire to eliminate Russian gas by 2027, this goal is increasingly difficult to achieve. Alternatives are more expensive, and competition for these supplies is growing. In fact, the outgoing EU energy commissioner recently suggested that European traders might consider purchasing Russian gas at Ukraine’s border, according to a report in the Financial Times.
This proposal comes ahead of the December 31 expiration of the gas transit agreement between Gazprom and Ukraine’s Naftogas. Ukraine has indicated it will not renew the deal, meaning that Russian gas flows to Europe could halt in the middle of winter, further driving up prices.
In November, Europe imported around 9.16 million tons of liquefied natural gas (LNG), with 4.32 million tons coming from the United States, according to data from Kpler. As competition for LNG increases globally, European prices are rising. The spot price for LNG in Asia has climbed by 76% this year, pricing out some of the more sensitive importers and leaving more LNG available for Europe, though at higher costs. The spot market price for North Asia has reached nearly $15 per million British thermal units (mmBtu), and Goldman Sachs predicts it could soar above $20 per mmBtu if Europe’s gas supply tightens further.
Samantha Dart, co-head of commodity market research at Goldman Sachs, warned that Europe’s vulnerability—due to its reliance on limited gas supplies and the impending loss of Russian volumes—could drive prices higher, especially as winter settles in.
Europe’s gas challenges, initially anticipated for the 2022-2023 winter, have been delayed by two unusually mild heating seasons. But as La Nina conditions bring colder weather, Europe is being reminded that its transition to renewable energy may not yet be enough to meet the continent’s energy needs. With wind turbines silent and solar panels covered in snow, the choice may come down to relying on fossil fuels—or facing severe energy shortages.
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