Europe Faces Gas Supply Crisis as Prices Surge
Europe is facing a gas supply crisis as prices rise ahead of winter. This surge is driven by low storage levels and disruptions in the Strait of Hormuz. As of mid-August, Germany's gas storage facilities were only 50.14% full. This is a significant drop from previous years, according to Gas Infrastructure Europe. It marks the lowest level for this time of year in several years. Storage is down about 25% compared to last year and more than 45 percentage points lower than in 2023 and 2024. Those years had strong backup plans due to the war in Ukraine.
The ongoing conflict in Iran has led to the effective closure of the Strait of Hormuz. This is a critical energy chokepoint that affects global gas supplies. European gas prices have surged 120% in 2026. The benchmark Dutch TTF reached about €63.7 per megawatt-hour on August 18. This is nearly double the price from the same period last year. The increase is due to several factors. Reduced hydro and nuclear generation from heat and drought has raised electricity demand. This has pressured gas-fired power stations to fill the gap.
According to energy market intelligence company Montel, Europe is unlikely to meet its goal of 90% gas storage capacity before winter. The European Commission has allowed countries to refill storage levels below 90%. This is to prevent panic buying and rising prices. Current estimates suggest storage could reach between 69% and 84% by November 1. Joachim Endress, a gas market expert at Montel, stated, "Continued disruption to LNG flows through the Strait of Hormuz means that pressure on Europe's gas market continues to build as winter approaches."
Related coverage: Europe’s Economy Faces €180 Billion Hit from Heatwaves.
The rise in gas prices is likely to affect energy costs across Europe. This is especially true for gas-fired power generation. Higher prices may lead to increased electricity costs for consumers and businesses. Low storage levels and ongoing supply risks could raise volatility in energy markets. Watch for updates on European gas storage levels and any developments regarding the situation in the Strait of Hormuz.
Based on reporting by: euronews.com, dw.com