Europe's gas storage sites sit at 54% capacity — the lowest in 15 years for this time of year — as the U.S.-Iran war diverts LNG cargoes to Asia and Russian pipeline supplies remain cut off.
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Europe faces 80% gas storage miss as Asian demand tightens supply
Europe will likely miss its 80% gas storage target before winter as competition with Asian buyers intensifies following the U.S.-Iran war, Equinor's chief executive said, leaving the region exposed to sharper price swings.
"We do not think that Europe will necessarily be able to fill up its stocks to more than 80% this autumn," Anders Opedal, chief executive of Europe's largest natural gas supplier, said in an interview Wednesday.
Storage sites across the European Union are at 54% capacity, the second-lowest level in 15 years and well below the five-year average, according to Gas Infrastructure Europe data. The shortfall stems from a dual supply shock: the U.S.-Iran war has effectively halted shipping through the Strait of Hormuz, disrupting about a fifth of global liquefied natural gas that typically flows to Asia, while Russian pipeline gas remains phased out because of the war in Ukraine.
The gap means Europe, which relies on LNG for about 30% of its import needs, will be more exposed to market price swings this winter than in previous years, Opedal said. Asian buyers are now drawing cargoes that earlier in the year were flowing into Europe, tightening global supply just as the continent enters its peak heating-demand season.
Equinor, which reported its highest quarterly profit since early 2023 on Wednesday, serves as a bellwether for European energy markets. The Norwegian state-controlled producer posted adjusted pretax earnings of $11.48 billion for the April-to-June period, up from $6.54 billion a year earlier and broadly in line with the $11.37 billion analyst consensus. Its shares have gained 54% year-to-date, outperforming the 30% rise in European energy stocks.
The company's average oil price realization jumped to $97.90 per barrel in the second quarter from $63 a year earlier, while its European gas price rose 32% to $15.79 per million British thermal units. Brent crude averaged $96.68 a barrel in the quarter, compared with $66.71 in the same period of 2025, after the U.S.-Iran conflict sent prices swinging between $70 and nearly $120.
LNG Cargoes Redirect to Asia
"The gas that was supposed to come from Qatar was supposed to go to Asia, and that means that LNG that earlier in the year came into Europe is now going to Asia," Opedal said, describing the intensifying competition for global supplies. The redirection marks a reversal from 2023 and 2024, when a glut of LNG cargoes — originally destined for Asian markets with weak demand — flooded into European storage and helped the region comfortably exceed its 80% fill target by November.
The last time European storage levels were this low heading into the refill season was in 2021, when a prolonged winter and low Russian pipeline flows preceded a gas-price crisis that pushed benchmark Dutch TTF futures above 300 euros per megawatt-hour. That winter, storage exited the heating season at about 30% capacity, triggering emergency government interventions across the bloc.
Equinor's Strategic Pivot
Equinor maintained its full-year output growth target of 3% for 2026 and its $13 billion investment plan. The company's downstream division, which includes energy trading, posted a $777 million quarterly profit, exceeding both the $623 million analyst estimate and the unit's own $400 million quarterly guidance.
The windfall from higher prices has prompted Equinor to double its share buyback program, returning more cash to shareholders, while simultaneously scaling back investments in renewable energy because of weak demand — a strategic shift that shows how the war-driven energy crisis is reshaping investment priorities among Europe's largest oil and gas producers.
This article is for informational purposes only and does not constitute investment advice.
