European gas prices more than double as reserves lag

European gas prices have more than doubled during the US-Iran war, reaching close to 75 euros per megawatt-hour as the continent tries to refill reserves before winter.

The European Union requires member states to fill gas reserves to at least 80 percent capacity by November 1 to reduce the risk of shortages in the coldest months. With less than two months to go, current fill levels average 67 percent, down from 79 percent at the same time last year.

Germany accounts for much of the decline. Stocks in Europe's biggest economy are at 53 percent of capacity, compared with 71 percent at this point last year.

Industry lobby group INES said no similarly low storage level had been recorded at this time of year and warned that the “window for sufficient refill is closing”. Europe also has to compete with Asia for liquefied natural gas shipments.

The war has effectively blocked the Strait of Hormuz, which before the conflict transported about one fifth of the world's LNG and oil.

Julien Mathonniere of Energy Intelligence told AFP that if disruptions in the Strait of Hormuz persist through winter, gas prices of 100 to 150 euros per megawatt-hour are plausible. Analysts cited in the item considered a return to the 2022 peak unlikely, when the European benchmark TTF briefly exceeded 300 euros per megawatt-hour.

Jonathan Schroer, a strategist at UniCredit, said hotter weather linked to the El Nino weather phenomenon had increased demand for electricity used in cooling, especially in major Asian LNG importers including China, India and Japan.

The current situation differs from the 2022 shock after Russia's invasion of Ukraine, when the EU moved to reduce reliance on Russian gas, which Schroer said then provided 45 percent of the bloc's requirements. Europe now faces tighter global LNG supplies and stronger competition for cargoes rather than the sudden loss of one main supplier.

European countries are also using less gas than in 2022 as renewables take a larger share of power generation. The European Commission said renewable energy accounted for nearly half of EU electricity generation in 2025. Analysts still expect costs to rise, but believe the shift reduces the risk of electricity bill increases as severe as those seen in 2022.