Europe faces a serious energy crisis ahead of winter due to supply disruptions in the Strait of Hormuz and the European Union's (EU) ban on Russian gas imports that will take effect at the beginning of the year. Experts note that gas storage stocks have fallen to their lowest level in 15 years.
Stocks and Prices
According to current data, gas storage facilities in Europe are only at a 48 percent fill level. By the end of October, when the refill season ends, this rate is expected to reach only 76 percent. Prices have jumped from the pre-war level of 31 euros to 42 euros per megawatt-hour; the peak seen in March was over 60 euros. The EU's decision to ban Russian gas imports, which will go into effect at the beginning of next year, further increases uncertainty.
Hormuz's Indirect Impact
According to oil and energy expert Amer al-Shubaki, supply disruptions in the Strait of Hormuz do not directly affect Europe; the continent's dependence on this strait is below 10 percent. Nevertheless, the indirect impact has been significant. The disruptions led to a supply contraction in the liquefied natural gas (LNG) market and rising prices. This caused Asian buyers to pay higher prices and attract ships destined for Europe; this competition brought Europe's stocks to historic lows.
Europe's Difficult Choice
According to al-Shubaki, Europe is stuck between two bad options: either enter winter with low stocks, risking energy security and public heating, or buy gas at high prices to fill storage, which will further strain inflation and already tight government budgets. The expert, who notes that alternative energy projects are unstable and unreliable, warns that a drop in wind energy during winter could consume the continent's remaining stocks.
Worst-Case Scenario
Europe, which ended last winter with a fill level below 30 percent, could face economic turmoil and social unrest if price increases are passed on to citizens. Governments bearing the cost would add a new financial burden on top of the COVID-19 pandemic, energy support during the Russia-Ukraine war, high inflation, and interest rates.
Al-Shubaki predicts that the gas market, which is undergoing a transformation in global energy security, will not return to normal before 2027 due to increasing demand. The expert said, "If shipments from the Gulf stop or remain limited, the worst-case scenario could be the halt of all economic sectors in Europe and Asia, and it could also spread to the technology and food sectors due to the disruption of substances such as sulfur and helium obtained alongside gas."
