Europe is about to start the gas stockpiling season with key storage tanks depleted, meaning it will need to compete even more with Asian buyers to secure supplies, just as the Middle East conflict disrupts energy flows.
Dutch facilities are now just about 6% full, the lowest for this time of year in data going to late 2010, according to Gas Infrastructure Europe. In Germany, home to the region’s biggest sites, inventories are also much lower than usual, at about 22%.
The continent’s gas storage is in focus as the war in Iran has tightened global supplies and boosted prices. The war has come at a tricky time as Europe emerges from winter with storage tanks depleted, fueling prospects that it will have to purchase more liquefied natural gas cargoes this summer to refill them, vying with Asia for fewer available supplies.
The European Union’s energy chief has told member states to start filling gas storage early in order to avoid supply competition that could push prices up over summer. Governments should also lower their storage filling targets to 80% and make the most of the flexibilities offered by EU law, Energy Commissioner Dan Jorgensen wrote in a letter.
Seasonal gas spreads have so far made it unprofitable to fill storage sites, but that’s starting to change. News of the extensive damage to Qatar’s facilities pushed up longer-term gas contracts in Europe last week. That improved key seasonal spreads needed to encourage summer stockpiling.
Benchmark European gas futures have jumped more than 55% since the war began. Europe’s total gas storages are about 28% full, the lowest for the time of year since 2022.