Europe faces gas storage risks as Iran conflict hits supply
European gas storage costs rise as the Iran conflict disrupts LNG shipments. Analysts warn storage levels could hit historic lows if supply issues persist.
Europe is facing an increasingly difficult and costly mission to replenish its natural gas reserves for the next winter season. The ongoing conflict involving the United States, Israel, and Iran has disrupted global liquefied natural gas (LNG) production and shipping, causing supply to tighten and market prices to surge. Gas storage is a cornerstone of European energy security, providing the necessary reserves for heating and electricity during peak demand months.
Since the 2022 invasion of Ukraine by Russia, the region has shifted its reliance from pipeline imports to LNG. According to S&P Global Inc., LNG is projected to account for 45% of Europe’s gas supply this year, necessitating the arrival of approximately 1,800 tankers. To meet storage targets this summer, buyers must secure an additional 180 cargoes compared to last year, bringing the total requirement to roughly 700 cargoes.
