• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 5 hours How Far Have We Really Gotten With Alternative Energy
  • 9 hours Bad news for e-cars keeps coming
  • 12 days What fool thought this was a good idea...
  • 10 days A question...
  • 11 hours The U.S. Is Determined to Revolutionize Its Microchip Industry
  • 15 days Why does this keep coming up? (The Renewable Energy Land Rush Could Threaten Food Security)
  • 15 days They pay YOU to TAKE Natural Gas
Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

The Real Challenge For Europe’s Energy Market Will Come Next Year

  • Europe’s natural gas storage sites are nearly full and there is a steady flow of LNG to the continent that will allow it to get through winter.
  • Mild weather in October and early November has further eased concerns about a major gas shortage in Europe this winter.
  • The real concern is next winter when Europe will have to restock its gas storage without the help of Russian supply.

Europe is more or less prepared to face this winter with nearly full gas storage sites and a steady flow of LNG imports. The real concern about gas supply is for the winter after that, the top executives of Europe’s biggest oil and gas majors say.  

As of October 31, gas storage sites in Europe were 95% full, with German storage at 99% full, according to data from Gas Infrastructure Europe. 

The comfortable storage levels, the high rate of LNG imports, and the mild weather in October and early November have eased concerns about gas supply and demand balances in the early part of the heating season. In fact, milder weather across most of Europe is postponing the start of the heating season, giving countries the opportunity to stock more gas with the decreased call for gas for heating - for now. 

The benchmark gas prices at the Dutch TTF hub have fallen this week and stay below $99 (100 euros) per megawatt-hour (MWh) as a warm October has allowed for more injections into storage instead of withdrawals.  In Germany, for example, the warm weather since the start of October has helped industry and households save 22% and 26%, respectively, of their gas consumption compared to the 2018-2021 average, says the Federal Network Agency, Bundesnetzagentur, the regulator which will enforce rationing if need be.   

Analysts believe that Europe will also continue to see a high volume of LNG imports as the new snap Covid lockdowns across China would weaken demand there. 

“The latest bout of Covid restrictions in China and declining demand in Asia overall should see (European) LNG imports remaining robust. This should ensure the record level of cargoes into north-west Europe and UK continues,” Refinitiv analysts told Reuters

However, the significant drop in Russian gas supply this year occurred only in June, meaning that Europe could still stock up on some Russian gas earlier this year.

Related: Venezuela’s Oil Exports Plunge In October

Ahead of the 2023/2024 winter, the gap in gas supply in Europe will be much wider without Russian gas. Europe will not be importing much Russian gas - or none at all if Russia cuts off deliveries via the one link left operational via Ukraine and via TurkStream - compared to relatively stable imports from Russia in the first half of this year before Moscow started gradually cutting volumes via Nord Stream in June until shutting down the pipeline in early September.

Executives at European majors BP and Eni also believe that it will be next winter that will be much more difficult for Europe. 

“I think it has been addressed for this winter,” BP’s chief executive Bernard Looney said at a panel at the ADIPEC energy conference in Abu Dhabi this week. 

“It’s the next winter I think many of us worry, in Europe, could be even more challenging,” Looney said during the panel moderated by CNBC’s Hadley Gamble. 

Claudio Descalzi, the chief executive of Italy’s Eni, said on the same panel, “We are in good shape for this winter.” 

“But as we said, the issue is not this winter. It will be the next one, because we are not going to have Russian gas – 98% [less] next year, maybe nothing,” Descalzi added. 

Russell Hardy, CEO at the world’s biggest independent oil trader Vitol, noted, “We’ve got a difficult winter ahead, and subsequent to that we’ve got a more difficult winter in the year ahead of that, because the production that is available to Europe in the first half of 2023 is considerably less than the production we had available to us in the first half of 2022.” 

In case of a normal winter this year, the gas system can ensure demand and supply adequacy, according to a newly published Winter Supply Outlook 2022/23 from the European Network of Transmission System Operators for Gas (ENTSOG). But in a colder than normal winter, all European countries are exposed to a risk of 10% demand curtailment for the entire winter season and of 10% to 27% in case of a peak day.  


The outlook also says that preparedness for winter 2023/2024 is critical, and maximum injection to all European storages should continue where possible and for as long as possible.  

“Not anticipating security of supply needs for the next gas year could result in the depletion of the gas storages at the end of the winter and make their refilling next summer impossible,” according to the outlook. 

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News