European households and industries face at least another year of high gas prices as depleted storage reserves will need replenishing, even if the Iran war ends and winter remains mild.
European benchmark gas prices have risen more than 150% this year. Disruptions to shipping through the Strait of Hormuz have blocked almost 20% of global liquefied natural gas (LNG) exports from Qatar and the United Arab Emirates, intensifying competition for alternative supplies.
Increased exports from the United States, Canada and Nigeria have partly offset the disruption, but competition for LNG cargoes has hampered Europe’s efforts to refill storage.
Analysts expect European gas storage to be 75–78% full by November 1, around 10 percentage points below the five-year average.
LSEG analyst Yuriy Onyshkiv said northwest European reserves could fall to around 20% by early April even under average winter conditions, increasing pressure to replenish stocks in 2027.
ABN Amro warned that a cold winter could reduce storage levels to 10–15%, making the following refilling season particularly challenging.
The bank’s senior energy economist Moutaz Altaghlibi said Europe was not facing an outright supply shortage but lacked a sufficient operational buffer. Supply disruptions and competition from Asia could therefore trigger further price spikes.
While most analysts do not expect a repeat of the extreme prices seen during the 2022 energy crisis, prices above €100 per megawatt-hour remain possible.
Consumers are expected to feel the full impact of this year’s wholesale price increases in 2027 as fixed-price retail contracts expire.
Germany’s price comparison website Verivox said gas tariffs for new customers had already risen 55% this year. Existing customers could face increases of 10–20% when their contracts are renewed.
In Britain, consultancy Cornwall Insight forecasts that the household energy price cap could rise a further 16% in January.
The EU’s full ban on Russian LNG imports from January 2027 is also expected to tighten supply.
However, expanding LNG production elsewhere and potentially milder, windier winter weather could ease pressure on prices. Rabobank maintained its average gas price forecast for 2027 at around €45 per megawatt-hour.
BNP Paribas commodities analyst Jason Ying said the market was unlikely to return to pre-conflict conditions before 2028.
Europe, natural gas, gas prices, energy crisis, LNG, gas storage, Strait of Hormuz, Iran war, European Union, energy bills