European Gas Inventories Could Fall Below 10% as Hormuz Flows Remain Disrupted
Key Facts
On November 3, 2026, the International Energy Agency issued its Global Gas Security Review, including its fourth-quarter gas market report and an assessment of Europe for the winter of 2026/27. The agency said European Union inventories are entering the heating season at their lowest levels since 2013. In a conditional simulation, inventories could fall below 10% of working capacity by the end of March 2027. This scenario requires both colder-than-average weather and continued disruption to liquefied natural gas flows through the Strait of Hormuz. That means the potential outcome depends on two simultaneous factors, not on a cold winter alone.
Europe's low inventories increase its reliance on global LNG supplies at a time when the market is facing a contraction in available cargoes. The agency said low European storage, together with limited storage options in several LNG-importing countries in Asia and South America, could intensify competition for a limited number of flexible cargoes in the coming months. It added that this could put upward pressure on spot prices, particularly during periods of higher demand. The competition highlights the European market's sensitivity to any shortfall in cross-border supplies, as buyers rely on cargoes that can be redirected between markets. The agency did not cite a price move for any specific trading session in this assessment.
Supply pressures are partly due to the effective halt in LNG flows through the Strait of Hormuz. The agency said shipments from Qatar and the United Arab Emirates fell by more than 60 billion cubic meters between March and October 2026 as a result. The agency expects global LNG supply to decline by 3% in 2026, or about 20 billion cubic meters. By contrast, global gas demand is expected to fall by about 1.5%, or nearly 65 billion cubic meters. But the overall decline in demand does not eliminate, in the agency's assessment, competition for flexible cargoes when import needs coincide with limited supplies.
Market pressures over the previous period were reflected in spot prices in Europe and Asia. Asian spot gas prices rose by about 80% year on year to an average of $21.5 per million British thermal units between March and October 2026. Over the same period, prices at the European TTF gas hub rose by about 70% to an average of about $20 per million British thermal units. The gap between the Asian price and European prices also narrowed from $2 per million British thermal units between March and July to about $1 between August and October. The agency said the narrowing reflected intensifying competition for flexible cargoes ahead of the heating season.
Low inventories increase the sensitivity of daily supplies as winter progresses. According to the agency, the rate of gas withdrawals from storage sites tends to slow when fill levels fall below 30% of working capacity. At that level, the European system could become more exposed to additional cold spells, technical failures or other supply disruptions. This matters given that the season began with inventories at their lowest levels since 2013, as slower withdrawals could limit storage's ability to offset import shortfalls when needed. This remains part of the market's operational risk assessment for the 2026/27 season.
The effects of low inventories could extend to the refilling phase after winter. The agency said low levels could significantly increase the need to inject gas into storage during summer 2027, potentially extending global market tightness into the following year. This would add seasonal demand for supplies at a time when Europe and other importing countries are competing for flexible cargoes. The agency linked this possibility to the path of inventories during winter and the persistence of flow disruptions, not to a firm forecast for price or supply levels. Actual weather and demand will determine how much Europe needs to import and inject into storage during the summer.