Europe is at risk of facing severe energy asphyxiation if disruptions to shipping through the Strait of Hormuz continue for another one to three months, top executives at the Norwegian energy giant Equinor ASA have warned. The situation in European natural gas storage facilities is already described as critical, with inventories remaining well below normal seasonal levels, increasing the risk of a major energy crisis ahead of the coming winter.
Natural gas storage is emptying dangerously
Europe entered the summer injection season with significantly depleted inventories, as storage facilities were only 28% full following a prolonged and harsh winter. Today, storage levels fluctuate between just 35% and 37%, whereas the seasonal average usually exceeds 50%. The European Union requires member states to maintain reserves at 80%-90% before the start of the winter heating season, a target that now appears extremely difficult to achieve. The situation is particularly concerning in key European economies:
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In the Netherlands, reserves collapsed to 5.8% at the end of winter—the lowest level in a decade.
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In Germany, storage levels dropped to approximately 20%.
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In France, levels hovered around 27%.
Hormuz threatens Europe's energy security
The crisis is directly linked to tensions in the Middle East and specifically to shipping in the Strait of Hormuz, through which a vast portion of global LNG and oil passes. Equinor warns that if disruptions continue for another 1 to 3 months, natural gas prices on the Dutch TTF—Europe's benchmark—could skyrocket to as much as 90 euros per megawatt-hour. In such a scenario, Europe will be forced to implement a reduction in industrial consumption, limit electricity generation from natural gas, and turn to alternative fuels.
The natural gas market has been 'turned upside down'
Another factor exacerbating the crisis is distorted pricing in the natural gas market. Traditionally, companies purchase cheap gas in the summer and store it for the winter. However, the opposite is happening today: summer prices are higher than winter prices. This phenomenon, known as backwardation, has blocked the normal inventory replenishment process. Seasonal price differences on the Dutch TTF remain negative by approximately 1.3 euros/MWh, making storage economically unviable.
Europe is pressured by Asia and LNG
Simultaneously, Europe faces stifling competition in the LNG market. Damage and delays at LNG facilities in the Middle East—primarily in Qatar—combined with the gradual shift away from Russian LNG, have dramatically increased competition for available cargoes. At the same time, strong demand from Asia is driving prices even higher.
Germany and Italy pursue different strategies
European governments are attempting to manage the crisis with different policies. In Italy, regulators and Snam are applying economic incentives and compensation to traders to fill storage facilities. Conversely, Germany avoids direct state subsidies and relies mainly on mandatory regulatory measures. The Bundesnetzagentur enforces strict storage filling targets, while Trading Hub Europe manages special market balancing mechanisms.
The window is narrowing
According to Equinor, a rapid de-escalation in the region could allow Europe to reach approximately 75% capacity by the end of the injection season. However, if the crisis in Hormuz is prolonged, the situation will become "extremely critical." The energy company estimates that the market will be forced into "demand destruction," with a potential reduction of 10 billion cubic meters in natural gas consumption for electricity generation.
Europe is not yet in the 2022 shock
Despite the severity of the situation, analysts note that the current crisis has not yet reached the levels of panic caused by the Russian invasion of Ukraine in 2022. A characteristic example is the German company Uniper, which, after being bailed out with billions of euros by Berlin during the 2022 energy crisis, is now gradually returning to a path of privatization. The company had recorded shock losses of 40 billion euros following the disruption of Russian natural gas by Gazprom, but it has since significantly strengthened its finances and has already begun repaying state aid. Uniper remains one of the most important natural gas importers and a key player in the European energy storage and trading market.
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