As Europe’s first proper winter in three years draws to a close, the continent is under pressure to replenish its natural gas reserves ahead of next winter. With storage levels significantly lower than the previous two winters, Europe faces a tough challenge in restocking supplies before the 2025/2026 heating season.
Current gas inventory levels are just 37% full, according to Gas Infrastructure Europe, far below the 60%+ levels seen in March 2023 and 2024. Europe will need to increase gas shipments during the summer to reach the required storage levels.
Following Russia’s invasion of Ukraine, Europe was able to manage mild winters, easing the strain on gas reserves. However, this winter was harsher, with the halt of Russian gas transit via Ukraine starting January 1, 2025, combined with low wind power generation, which accelerated gas depletion at the fastest rate in seven years.
Challenges in Summer Refill Season
As the winter heating season ends, Europe’s focus shifts to summer refilling. The challenge? Securing enough liquefied natural gas (LNG) at competitive prices to replenish inventories before the next winter.
According to Reuters, Europe may need an additional 250 LNG cargoes this summer to meet the 90% storage target by November 1, 2025. This assumes the EU doesn’t adjust its goals, with current storage levels potentially dropping to 35% by the end of March.
The global LNG market is tightening. The International Energy Agency (IEA) recently warned that lower EU gas inventory levels will demand higher LNG imports, driving up global gas prices. LNG supply is expected to grow by 5% in 2025, driven by increased production in North America, but this will be partly offset by the cessation of Russian gas flows through Ukraine.
Declining European Gas Demand
European demand for natural gas has fallen since 2022, driven by stronger renewable energy generation and weaker industrial demand amid volatile price fluctuations. According to Shell’s annual LNG Outlook for 2025, LNG imports into Europe dropped by 19% in 2024 due to strong renewable energy output and limited recovery in industrial gas demand.
However, the cold winter and low wind power generation led to significant withdrawals from gas storage, pushing prices higher. As a result, Europe is expected to increase LNG imports in 2025 to meet storage requirements.
Rising Gas Prices and Market Tightness
Europe’s efforts to replenish its gas reserves will face higher costs due to the tightening LNG market. The good news is that Europe has been able to outbid Asia for LNG supplies, with European prices remaining higher than those in Asia. In January and February 2025, over 80% of U.S. LNG exports were sent to Europe, where prices remained favorable.
However, the challenge is that the cost of securing LNG for summer storage is rising. Summer prices for 2025 are higher than winter prices for 2026, a shift from the usual pattern where winter prices are typically higher. This makes stocking up less economically attractive for utilities.
To address this, utilities in key European countries, including Germany, are calling for government support to help refill inventories ahead of the 2025/2026 winter. There are also reports that the EU may consider easing its storage targets.
Outlook for Global Gas Markets
With strong demand to replenish gas stocks, Europe’s natural gas prices are expected to stay high throughout the summer. The IEA warns that the global gas market will likely remain tight until at least 2026, when a significant influx of new LNG supply is expected.
As Europe races to fill its gas reserves, the challenge remains to balance demand, prices, and available supply to ensure energy security for the upcoming winter.
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