Key information
- The EU’s total gas storage capacity cannot guarantee security against price volatility due to supply disruptions.
- Alternative sources such as the United States and Azerbaijan have limits to fully satisfy Europe’s total demand, leaving dependence on Russian gas to persist.
- Full storage levels provide protection but are insufficient to provide security against shortages, particularly during an exceptionally cold winter.
Despite reaching its full gas storage capacity, Europe still faces volatile gas prices due to constant supply disruptions. Although the EU has diversified its suppliers beyond Russia, alternative sources such as the United States and Azerbaijan fail to fully satisfy Europe’s total demand.
Dependence on Russian gas persists, despite sanctions imposed by the EU. Norway is currently the largest supplier, supplying around 30 percent of the EU’s gas needs. However, recent incidents such as production shutdowns at Norwegian platforms highlight the fragility of supply chains and the potential for price volatility. Full storage levels provide some protection against shortages, but they are not enough to ensure safety in the event of an exceptionally cold winter.
Growing gas supply problems
Experts warn that Europe’s gas supply situation could worsen in 2025 compared to 2024 due to several factors. Efforts by the EU to reduce its dependence on Russian gas by destroying demand have led to a drop in consumption, but alternative sources of supply are not yet readily available. New LNG export terminals are facing delays and existing pipelines carrying Russian gas remain essential for supplying Europe.
Discussions with Azerbaijan regarding possible gas swaps offer a partial solution, but Azerbaijan’s limited export capacity poses a constraint. The recent decline in TTF prices following these discussions was short-lived, as overall demand for natural gas remains high, winter is approaching, and the deal with Azerbaijan has not yet been finalized.
Securing Europe’s energy future
If the EU fails to completely replace Russian gas, storage levels could fall significantly by the end of winter, which could lead to higher prices. This situation highlights the ongoing challenges Europe faces in securing its energy supply and highlights the need for continued diversification and investment in alternative sources.
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