Europe risks entering the heating season with gas storage levels at their lowest point in at least 15 years, potentially driving higher energy costs for businesses and households. EU storage facilities are projected to finish the critical restocking period only 76% full by October, well below historical averages, according to Wood Mackenzie data. This shortfall follows supply disruptions from the US-Iran conflict that halted LNG shipments through the Strait of Hormuz, normally carrying 20% of global supplies.

Storage levels began the season at just 28% capacity after an unusually cold winter, compared with healthier starting points in previous years. Current facilities average 48% full, with European benchmark gas prices hovering around €40 per megawatt hour. While this remains within normal ranges and far below the €342 peak seen during Russia's 2022 invasion, the inadequate refill rate has created supply vulnerabilities.

The European Commission has lowered its storage target to 75-80%, down from the previous 90% goal, arguing this level maintains energy security while avoiding price inflation. However, analysts warn that reduced Russian LNG imports (currently 14% of Europe's total) and delayed Qatari supply recovery could create significant price volatility during colder months. Futures markets already reflect growing bets on winter price spikes. Goldman Sachs estimates suggest storage could reach 74% capacity if Qatari production returns by July, but delays could push levels down to 70%. Commercial speculators are positioning for higher prices, while shipping through the Strait of Hormuz faces ongoing uncertainty beyond the 60-day ceasefire extension.

Analysts expect prices to rise again as winter approaches, particularly if cold weather intensifies demand. The combination of geopolitical tensions, supply chain bottlenecks, and reduced Russian imports creates a perfect storm for European energy markets heading into 2027.