“Winter Is Coming”: Europe Faces Risk of Another Gas Crisis

Europe’s gas market has crossed another worrying threshold. Prices on the benchmark TTF exchange moved above 70 euros and approached 71 euros, setting a new record since the conflict in the Persian Gulf began.

The level matches prices seen during the aftermath of the 2021-22 energy crisis and stands far above the pre-pandemic norm. Average prices in 2017-19 were five to six times lower, while the 2020 average was 14 times lower.

The timing is particularly uncomfortable for Europe. Storage facilities are only 65% full, described as a historically low level and below the position in 2021 and 2022, when the gas crisis was at its worst. The continent still needs to replenish supplies before winter.

The latest rise followed renewed tensions in the Gulf, but the market is also facing a familiar supply contest. Europe is again competing with Asia for gas, pushing prices higher, while it plans to end Russian gas deliveries by the close of the year.

The comparison with 2021 is stark. On Aug. 29 that year, European storage stood at 66.8%, the lowest level recorded at the time. Traders had delayed purchases as prices kept rising through the summer. Supply concerns deepened when Norwegian gas facilities entered maintenance and Asian demand began competing with Europe’s.