Europe Starts Winter With Its Lowest Gas Stocks of the Decade

Germany’s storage sites were 58% full, according to Gas Infrastructure Europe, and the EU-wide level was well below the five-year average for this point in the season. The International Energy Agency modeled a cold winter combined with continued disruption in the Strait of Hormuz; under that scenario, EU inventories could drop below 10% of working capacity by the end of March, S&P Global reported. A late cold spell could be especially difficult to manage because withdrawal rates slow as storage sites empty.

Rystad says Europe may need to offer higher prices to keep US LNG cargoes from heading to Asia, where buyers are seeking alternatives to lost Middle Eastern supply. But high prices are also discouraging consumption. The consultancy expects a mild winter in Northeast Asia and says LNG at $30 encourages a shift to coal. Bernstein estimates that a super El Niño would reduce Japan’s winter heating demand by 19%, but LNG consumption by just 2%. Bloomberg reported Monday that cheap domestic supply is also limiting Chinese spot purchases: China’s average LNG price is near $22, almost $10 below the Japan/Korea Marker.

The US market has so far remained apart from the global price surge. The Energy Information Administration’s Nov. 10 outlook put Henry Hub at an average of $2.87 from November through March, 16% below its forecast the previous month. US export terminals are running near full capacity; Rystad expects a winter price peak around $4.

Supply risks remain concentrated around the Gulf. October was the busiest month for LNG tankers leaving the Strait of Hormuz since February, but also the worst month for attacks on shipping since the war began. S&P Global Energy tracking cited by Reuters counted 31 laden LNG tankers exiting the strait, up from 23 in September. The Washington Institute for Near East Policy counted 37 ships struck that month.

Kpler data put Qatar’s October exports just above 2.7 million tons, compared with nearly 6.2 million in February. QatarEnergy said in March that Iranian attacks had cut 17% of its export capacity and has extended force majeure through at least the end of December. The IEA says supplies from outside the Gulf have replaced about two-thirds of lost Qatari and UAE volumes since March, but global LNG supply is still expected to fall 3% this year—the steepest drop on record.

Rystad says October transits stabilized and could support a supply recovery by the second quarter of 2027, though output is “one escalation away from cratering again.” The consultancy sees upward price pressure from a cold snap in Europe or an El Niño-related drought that reduces hydropower in Colombia and Brazil. Mild weather in Europe and Asia, or a return of Middle Eastern LNG, would weigh on prices. European gas has risen for three sessions; front-month TTF was up 2% to €88.42 per megawatt-hour on Thursday morning.

The IEA sees a longer-lasting supply shortfall, estimating cumulative LNG losses of 150 billion cubic meters from 2026 to 2030—15% of the new supply expected globally over that period—and no meaningful relief before the decade’s end.