Key facts
- Europe's natural gas storage is at 54% capacity, significantly below the five-year average.
- The continent is unlikely to reach 80% storage capacity before winter.
- Increased demand from Asian buyers is reducing the availability of LNG cargoes for Europe.
- Disruptions in the Strait of Hormuz are diverting U.S. LNG shipments to Asia.
- Norway is supplying approximately one-third of Europe's gas imports.
Europe is facing a critical winter with its natural gas reserves at their lowest point in 15 years, according to Equinor CEO Anders Opedal. Current storage levels stand at approximately 54%, significantly below the five-year average and raising concerns about the continent's ability to meet heating demands.
The situation is compounded by fewer available LNG cargoes than anticipated. Asian buyers are absorbing a larger share of spot cargoes, partly due to disruptions in the Strait of Hormuz affecting shipments. This has intensified competition, with European utilities bidding against higher prices for replacement supplies.
Norway, now supplying about one-third of Europe's gas imports, offers a clear view of the challenging outlook. LNG constitutes roughly 30% of Europe's gas imports, making the refill campaign susceptible to global market dynamics. Asian demand is particularly strong, with Japan experiencing record wholesale electricity prices and India accelerating long-term LNG contracts.
Estimates suggest Asian LNG imports will rise significantly in July, while Europe's imports are projected to decrease. U.S. cargoes that previously replenished European storage are increasingly being rerouted to Asia, where buyers are offering higher prices.