Europe’s Gas Crisis Isn’t Over Despite Full Storage

Why Full Storage Isn’t Enough

Europe’s gas storage facilities are currently at 95% full – a level that would typically signal strong preparedness for winter demand. However, recent events have shown that storage levels are an imperfect safeguard against price volatility and supply risk. When Norway’s Equinor temporarily halted production at a key platform due to a safety alert, benchmark gas prices at the Dutch Title Transfer Facility (TTF) surged to 43.68 euros per MWh – the highest since December 2023. Norway supplies roughly 30% of the EU’s natural gas, making it the bloc’s largest current provider. Even a brief disruption from this source was enough to trigger market anxiety, revealing how deeply Europe remains reliant on a few key suppliers despite efforts to diversify.

The incident highlights a fundamental limitation of storage: it can buffer against short-term demand fluctuations, but it cannot compensate for prolonged or repeated supply interruptions. If cold weather drives up consumption or if multiple suppliers face issues simultaneously, stored gas could be depleted rapidly. Moreover, storage does not address the underlying issue of price formation in global markets, where benchmarks react instantly to any perceived threat to supply continuity.

The Lingering Role of Russian Gas

Despite sanctions and political efforts to reduce reliance, Russian gas continues to play a significant role in Europe’s energy mix. According to the EU’s State of the Energy Union Report released in September 2024, the share of Russian gas in EU imports fell from 45% in 2021 to 18% by June 2024. While this decline is often cited as a success story, the same report notes that demand destruction – reduced consumption due to high prices and conservation measures – accounted for 138 billion cubic metres of saved gas between August 2022 and May 2024. This reduction came at a cost, with some businesses curtailing operations or shutting down due to unaffordable energy bills.

More tellingly, Russia remains the EU’s second-largest supplier of natural gas, surpassing even the United States in volume terms. Pipeline flows through Ukraine, though diminished, still carry Russian gas into Eastern and Central Europe. The fact that Ukrainian transit infrastructure remains a conduit for Russian supplies – despite the ongoing conflict – underscores the practical limits of political decoupling. As long as alternative sources cannot fully replace these volumes at competitive prices, Europe’s exposure to Russian gas will persist.

Alternative Supplies Face Constraints

Efforts to replace Russian gas have led Europe to turn to Norway, the United States, and Azerbaijan. Yet each of these sources faces its own limitations. U.S. liquefied natural gas (LNG) export capacity is constrained by regulatory delays; although a court struck down the Biden administration’s pause on new LNG terminal approvals, it will take years for planned capacity to come online. In the meantime, global demand for LNG remains strong, particularly from Asia, creating competition for available cargoes.

Norway, while reliable, cannot unilaterally fill the gap left by reduced Russian flows. Any disruption to its offshore infrastructure – as seen with the Equinor incident – has immediate market consequences. Meanwhile, discussions with Azerbaijan about increasing gas exports to Europe remain inconclusive. As reported by Bloomberg, any potential agreement would likely require a swap arrangement, since Azerbaijan lacks sufficient export capacity to independently replace Russian volumes. Until such deals are finalised and infrastructure is scaled, these alternatives remain partial solutions at best.

The result is a supply outlook that experts describe as uncertain. HSBC’s head of European oil and gas research, Kim Fustier, warned that Europe’s gas supply prospects for 2025 may not improve – and could even worsen – unless a comprehensive replacement for Russian gas is secured. In a worst-case scenario, a cold winter could draw storage levels down to as low as 30%, reversing the gains made through costly conservation efforts.

What this means

Europe’s gas situation illustrates a crucial lesson in energy security: filling storage caverns is necessary but not sufficient for resilience. Markets remain sensitive to supply disruptions because the bloc’s alternatives are still constrained by geography, infrastructure, and global competition. While political narratives have celebrated reduced reliance on Russian gas, the reality is that volumes from Moscow continue to flow, and no single alternative has emerged capable of matching its scale and consistency. For businesses, policymakers, and consumers alike, the message is clear – preparing for winter involves more than measuring storage levels. It demands sustained investment in diverse supply sources, diplomatic engagement with producing nations, and honest recognition that luck – such as mild winters – cannot be a long-term strategy. Until Europe secures a stable, affordable, and sufficient replacement for Russian gas, the spectre of price spikes and supply anxiety will remain, no matter how full the storage tanks appear.