Europe is bracing for a potential surge in natural gas prices this winter, as gas storage levels across the European Union have fallen to their lowest point in more than a decade while global LNG markets tighten amid the ongoing Middle East crisis.

EU storage sites stood at just 57% full as of August 5, according to data from Gas Infrastructure Europe. That marks the lowest storage level for this time of year since 2011 and represents a sharp decline from the nearly 70% full recorded at the same point last year.

The shortfall is especially significant given Europe's increased dependence on LNG since Russia sharply curtailed pipeline gas deliveries in 2022, which left storage facilities as a critical supply buffer. Storage levels, which were already depleted at the close of the 2025/2026 winter heating season, have not rebounded over the summer months at the pace seen in previous years. The sluggish refill is attributed to a severely tightened global LNG market following the Iran war, which drove prices sharply higher and allowed Asian buyers to outbid European utilities for spot cargoes not constrained by Middle East shipping disruptions.

Consequently, Europe now risks missing its indicative target of having gas storage facilities 80% full by the start of December — a benchmark established under EU regulation after the 2022 energy crisis. Analysts warn that the diminished storage buffer leaves gas prices exposed to sharp spikes between November and March, particularly if Europe experiences a cold winter.

The disruption of LNG supply from Qatar — one of the world's largest LNG exporters — has pushed the market into backwardation, a structure in which near-term prices exceed those for later delivery periods. This dynamic actively discourages stockpiling, leaving Europe vulnerable to winter weather conditions and the uncertain pace of LNG flow recovery from the Middle East.

"If there is a very cold winter or there is an extended period of cold weather, then you might find that you have to do some sort of demand mitigation, higher prices, or else European markets would run out of gas," David Lewis, senior research analyst at Wood Mackenzie, told Reuters.

Wood Mackenzie analysts warned last week that Europe's historically low gas storage levels have placed winter 2026/27 supply security at risk. Major new LNG export capacity additions remain limited in the near term, reinforcing analyst expectations that supply tightness could persist beyond a single heating season.

"Low European inventories, strong Asian demand and limited new LNG supply growth almost guarantee elevated prices through this winter and into 2027," said Massimo Di Odoardo, Vice President of Gas and LNG Research at Wood Mackenzie, in a press release.

By Tsvetana Paraskova for Oilprice.com