European gas storage is only just above 50% full during active refill season, and diesel inventories sit at their lowest since 2022. Disrupted Qatari LNG exports and a Russian diesel export ban have pushed the EU toward costlier supply ahead of the 2026/27 heating season.
Tightening global oil and gas supply is putting Europe on course for a difficult winter, and the continent's dependence on energy imports is the reason. Storage tanks hold far less gas than they should at this stage of the year, and a diesel crunch now threatens fuel supply security for the heating season.
Qatari force majeure raised Europe's import bill
The first warning signs emerged as early as March, when the U.S. and Israeli war against Iran crippled Qatar's LNG export infrastructure and forced the Gulf state to declare force majeure on exports. Qatari LNG was the cheaper option for a bloc heavily dependent on LNG imports since it ended Russian pipeline imports amid its Ukraine war-related sanction push.
With those volumes out, the EU — which sources about 21% of its energy from natural gas, per Eurostat figures — must lean more heavily on expensive U.S. liquefied gas. Wood Mackenzie, reporting a 50% rise in the benchmark EU gas price since mid-June, noted: "gas storage is only just above 50% full, an historically low level".
LNG imports fall during refill season
Those price moves have very likely pulled LNG imports down, even though this is active storage refill season. This month's arrivals are seen at 6.3 million tons, according to Kpler figures cited by Reuters, which would be the lowest since September 2024.
Wood Mackenzie warned that if LNG imports continue at the current subdued pace, EU gas storage would reach only 75% by November, when the heating season officially starts. That sits below the 90% target Brussels set for member states in 2022, and the EU's leadership has since indicated it would lower the November targets — which does not improve supply security.
Diesel stocks are thinner than gas
Prices could, and probably will, rise further, because securing winter supply is a matter of necessity rather than preference. EU industries still get a solid portion of their electricity from gas, and gas supplies 30% of household heating needs.
But supply is tightening in fuels as well, notably diesel. Ukrainian drone attacks on Russian refineries prompted a ban on diesel exports. Russia is one of the biggest diesel exporters at around 700,000 to 800,000 barrels daily.
European diesel inventories are even lower than gas inventories and at their lowest since 2022, Reuters reported this week. U.S. diesel inventories are also down considerably, so the world's biggest diesel exporter has limited space to boost exports even with refineries running at record rates.
Rystad Energy analyst Janiv Shah told the Financial Times that current destination countries will now also compete for the volume Europe is pulling — the LNG squeeze repeating itself in diesel.
Source: Oilprice.com
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