Europe faces natural gas shortage as storage levels fall and geopolitical tensions rise

The current situation regarding natural gas storage in Europe, as of February 10, 2025, reveals significant concerns about the region’s energy security. Here are the key takeaways from the data:

1. Storage levels across Europe: Overall, natural gas storage across Europe is below 50% of capacity, a sharp decline from 67% at the same time last year. This decline highlights the challenges Europe faces in maintaining adequate gas supplies.
2. France’s struggling storage: France, one of the largest energy consumers in Europe, holds the lowest storage level in the EU at just 29.85%. This is well below the European Commission’s target of 41%.
3. Non-EU countries: Ukraine and the United Kingdom also have notably low storage levels, with Ukraine at 9.33% and the UK at 25.73%. These low levels reflect the ongoing challenges of sourcing gas amid geopolitical tensions.
4. Full storage in some countries: On a more positive note, Portugal’s storage is full, while Sweden and Spain are at 88% and 69%, respectively, offering a sense of relative security in those countries.
5. Impact of the Russian-Ukrainian war: The EU has ceased purchasing gas from Russia due to the ongoing war in Ukraine. The expiration of the Russian-Ukrainian gas transit agreement at the end of 2024 further exacerbates the supply issues. In 2023, Russian gas transported to Europe via pipeline dropped significantly by 28.4%, totaling just 14.6 billion cubic meters.
6. Shift to LNG imports: In response to disruptions in traditional gas supplies, EU nations have increasingly turned to liquefied natural gas (LNG) imports and focused on improving energy efficiency. These strategies are crucial for mitigating the impact of reduced Russian gas exports.
7. Rising natural gas prices: As a result of the lower storage levels and geopolitical tensions, natural gas prices have surged. Futures contracts for March on the Dutch TTF hub reached a two-year high of 58.75 euros/MWh.
8. Expert warnings: Experts have warned that Europe’s energy policymakers were overly optimistic about relying on light interventions to ensure energy security. They now predict that Europe could face a gas deficit by the end of winter, which would necessitate expensive measures to rebuild reserves.
9. EU storage capacity: Europe’s total natural gas storage capacity is about 113 billion cubic meters, with 18 of the 27 EU member states having storage facilities. Germany has the highest capacity at 25.1 billion cubic meters, followed by Italy (20.2 billion) and the Netherlands (14.7 billion).

In summary, Europe’s natural gas storage situation is precarious, and countries are grappling with the effects of reduced Russian gas supplies, the need for LNG imports, and the possibility of an expensive recovery to refill reserves. The region is likely to face challenges in securing enough gas supplies in the near future.