Europe is facing a decrease in gas reserves and rising energy costs, especially during the winter season. According to reports, the European Union (EU) has spent around 100 billion euros on oil and gas since the beginning of this year. Meanwhile, since 2022, additional energy costs have exceeded 900 billion euros, despite a decrease in demand.
Rising Prices and Storage Challenges
Natural gas prices in Europe have more than doubled since the start of the war led by the United States and Israel in Iran. This winter could be the toughest season in terms of energy supply and prices, especially since the onset of the war in Ukraine and the related sanctions on Russian energy. Dan Jørgensen, the European Union energy commissioner, has warned that the winter season with very high prices for oil and gas may be challenging, although he assured that there would be no issues with supply.
Gas Reserves and Trade Restrictions
Gas reserves in Europe have reached their lowest level since 2022. In September, European gas reserves were about 67% full, while the seasonal average is around 80%. Germany, which has the largest storage capacity in Europe, is approximately half full and is expected to fail to meet the official target of 80% storage this year. Severe restrictions on energy trade through the Strait of Hormuz have significantly increased energy prices. Oil prices have risen by 65%, diesel prices by 45%, and jet fuel prices by 112% between September 25, 2025, and 2026.
As the high-demand winter months approach, uncertainty about gas demand also increases with the forecast of the El Niño weather cycle. Existing threats to fuel transport in the Strait of Hormuz, as well as attacks by Houthis in the Red Sea, raise concerns. Therefore, there is a possibility of global oil trade restrictions until 2027.
Meanwhile, Chris O'Shea, the CEO of Centrica, has announced that the UK has almost no gas in storage for the upcoming winter. This could lead to unemployment in the industry, especially in areas heavily reliant on production.
