The gas deficit in Europe before winter has reached alarming levels
- The gas deficit in the EU could reach 14 billion cubic meters
- Gas reserves at a record low
- High prices and reduced consumption are expected this winter
The gas deficit in Europe before winter
The gas inventory situation in the European Union has reached a critical point. According to reports reviewed by Politico, gas reserves in EU storage facilities have fallen to a record low for this time of year, standing at just over 70%. This creates serious risks for the region's energy security, especially considering the approaching winter when gas demand traditionally increases.
The natural gas deficit in the EU this winter could reach 14 billion cubic meters, which is equivalent to about 7% of the bloc's needs. Such a volume of gas could power between 10 to 12 million households. This highlights how vulnerable EU countries have become amid global supply disruptions and rising energy prices.
Analysts from IEEFA, such as Ana Jaller-Makarevich, warn that record-low gas reserves leave the European Union with less buffer against potential supply disruptions. If reserves are depleted, countries will have to purchase more gas to replenish storage, which could lead to a vicious cycle of low reserves and high prices.
The situation with gas stocks in the EU
According to forecasts from the European Network of Transmission System Operators for Gas (ENTSOG), in the event of a harsh winter, the level of gas storage could drop to 11%. This is the minimum level necessary to maintain strategic reserves that cannot be easily utilized. The problem is exacerbated by the upcoming ban on long-term contracts for the supply of Russian liquefied natural gas, which will come into effect in January.
According to estimates from IEEFA, this will lead to an additional reduction in gas imports to Europe by 7 billion cubic meters. Over the past two years, winter gas demand has gradually increased, while import volumes have remained virtually unchanged, forcing countries in the bloc to rely more on storage reserves.
In January of this year, net gas withdrawals from storage amounted to 22.6 billion cubic meters, significantly more than in previous years. This highlights the growing dependence of EU countries on reserves, making them more vulnerable to market fluctuations.
Possible consequences of gas shortages
American LNG producers are operating at nearly full capacity, which may exacerbate the supply shortage in the market. Some experts suggest that this will lead to further increases in gas prices in Europe, which, in turn, may cause a redirection of LNG supplies from Asia to Europe.
The scenario developed by ENTSO-G suggests a 'global shortage', where the LNG available for Europe will decrease by 20%. This could lead to an even greater shortage and price increases, negatively impacting consumers and the region's economy.
Alternative sources and forecasts
Despite the EU's efforts to reduce dependence on Russian hydrocarbons, the results have not yet met expectations. As a result of sanctions against maritime supplies of Russian oil, the EU has almost completely stopped importing Russian crude oil; however, the share of Russian gas in the total gas import volume in the EU in September was about 12%.
The difficulties in replenishing gas storage before winter are also exacerbated by global issues, such as the war in Iran, which limits global gas supplies. This creates additional risks for Europe's energy security amid rising gas demand.
European Commission President Ursula von der Leyen recently confirmed the EU's intention to completely stop importing Russian gas by the end of 2027. However, given the current realities, this may prove to be a challenging task requiring significant effort and time.
Source: UNIAN
