The European Union faces a potential natural gas supply shortage in the coming winter that could impact the energy needs of more than 10 million households, according to a report released on Friday by the Institute for Energy Economics and Financial Analysis, a U.S.-based think tank.
The think tank reported that as ongoing Middle East conflicts continue to disrupt global energy supplies, the EU is bracing for a natural gas deficit of up to 14 billion cubic meters in the coming winter season. This shortfall accounts for approximately 7 percent of the bloc's total demand, the report said.
The report also noted that "the EU is heading into winter with gas storage about 72.4 percent full, the lowest for this time of year since records began in 2011."
Adding to the pressure, the EU's upcoming comprehensive ban on imports of Russian liquefied natural gas (LNG), set to take effect in early 2027, will further reduce European imports by about 7 billion cubic meters. While increasing U.S. LNG imports remains an option to bridge the gap, the financial cost is substantial.
At current prices, importing additional U.S. LNG would incur an extra 3 billion euros (3.36 billion U.S. dollars) -- a 12 percent increase compared to last year. Moreover, U.S. LNG production is already nearing full capacity, leaving limited room for incremental supplies to Europe.
Separately, the European Network of Transmission System Operators for Gas warned on Thursday that in the event of a severe winter, European gas storage levels could plummet to 11 percent. Such a depletion would hit the baseline of strategic reserves, making it difficult to draw upon remaining inventories safely.
To ensure storage levels can be restored to 30 percent by the end of winter to better weather subsequent cold snaps, EU member states would need to curb supply equivalent to 7 percent of demand, according to the report.
EU faces natural gas shortage as winter approaches: U.S. think tank
