The good news is, Europe’s gas refill remains on track. The bad news is, it risks complacency. The continent’s energy security hinges on a precarious alignment of geopolitics, meteorology and market forces, a perilous trifecta. As summer unfolds, policymakers will divide their gaze between storm forecasts and the whims of the White House.
The European gas market passed a milestone over the weekend, with inventories rising above 50 per cent of storage capacity—a modest triumph given the perilously low starting point. A collective exhalation echoed through Brussels, Berlin and other capitals, but the relief is fragile. For Europe to emerge unscathed from its annual refilling season—which runs from April to November—everything must continue to go right. Yet, as so often since the energy crisis erupted in 2021, the continent remains hostage to forces beyond its borders.
Two shifts
The starting gun for this year’s refill was fired from a weaker position than in recent years. Inventories ended the 2024-25 winter at 33.5 per cent of capacity, well below the 55 per cent average of the previous two seasons. That disparity has forced Europe into a larger-than-usual summer buying spree. Prices, though down from February’s two-year high of nearly €60 ($68) per megawatt hour, remain elevated at around €35—roughly double levels seen in early 2023. The region must now replenish stocks while contending with two structural shifts: a steep drop in Russian pipeline gas—after the expiry of the Ukraine transit deal in late 2024—and rising reliance on liquefied natural gas (LNG).
So far, Europe has enjoyed a buyer’s market. China, typically the largest LNG importer, has been subdued—a casualty of sluggish manufacturing activity linked to the Sino-American trade war. Meanwhile, surging supply from new projects in America and Canada has cushioned the blow. This combination has allowed Europe to stockpile gas at a steady clip. Yet policymakers are not resting easy. The European Commission is fast-tracking rules to lower mandatory storage targets from 90 per cent to 83 per cent of capacity by November, with flexibility on timing. Germany has moved faster, unilaterally cutting its target to 80 per cent last month.
Filling targets
The EU’s Gas Storage Regulation, formally Regulation (EU) 2022/1032, currently aims to enhance gas supply security by requiring member states to fill their underground gas storage facilities to at least 90 per cent of their capacity by 1 November each year. This regulation, adopted in June 2022, is set to expire at the end of 2025. Member states with underground gas storage facilities are required to meet specific filling targets throughout the year, culminating in the 90 per cent target by 1 November.
On 5 March 2025 the European Commission put forward an amendment to the regulation adopted during the 2022 energy crisis. The amendment extends the application of the Gas Storage Regulation by two years (until the end of 2027). This extension had been announced as part of the Clean Industrial Deal of 26 February 2025.
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It means that member states lacking storage facilities must store a portion of their domestic gas consumption in member states with storage. Authorities in each member state are responsible for ensuring that storage system operators are free from external influence that could jeopardize security of supply. Gas companies are required to notify their national authorities of major long-term gas supply contracts that may be relevant for security of supply.
A risky logic
Now, the proposed extension would also allow for flexibility in meeting the filling targets, considering market conditions and potential for lower gas prices. The European Parliament has supported a proposal to lower the filling target to 83 per cent and allow countries to meet it at any time between October 1 and December 1, with further flexibility for unfavorable market conditions. The final version of the regulation may include these flexibilities, allowing member states to adapt their storage plans based on market conditions.
The logic of diluting the requirement is seductive—but not without risk, Bloomberg expert columnist Javier Blas writes. “Reducing the inventory requirement isn’t cost free. It means going into the winter with a reduced insurance policy— fine if all goes well, not so great if, for example, a cold winter stresses the European market,” Mr Blas argued in a recent Bloomberg article.
Reducing the inventory requirement means going into the qinter with a reduced insurance policy. Javier Blas, Bloomberg
Lower targets reflect a belief that Europe’s energy balance has improved: gas demand has fallen as energy-intensive industries curtail output, while a wave of new LNG projects will boost global supply from late 2024. Yet reducing storage thresholds also pares back the region’s insulation against shocks. If refilling continues at the average rate of the past three years, Europe will hit 80 per cent by November—meeting the revised target but entering winter with its second-lowest inventory level in a decade, surpassed only by the crisis-stricken 2021-22 season.
Politics and weather
Three risks cloud this benign trajectory—two linked to American politics, the third to the vagaries of weather. First is the spectre of fresh US sanctions on Russian LNG. Europe still imports 7 per cent of its gas from Russia, mostly via LNG shipments. Though Donald Trump has historically resisted targeting Russian energy exports, secondary sanctions—penalising buyers of Russian LNG—could appeal to a president keen to weaken Vladimir Putin without harming American interests. For Europe, such measures would present a dilemma: unable to oppose pressure on Moscow, yet forced to scramble for alternative supplies mid-refill.
The second risk stems from the trade war itself. China’s LNG imports have been depressed partly due to US tariffs throttling its industrial sector. A truce between Washington and Beijing—a plausible outcome under a deal-seeking Trump administration—could reignite Chinese demand, tightening the global LNG market.
Finally, there is the weather. A cool Asian spring—notably in India, owing to an early monsoon—has suppressed gas demand for air-conditioning. This could reverse if summer temperatures spike. Closer to home, 16 per cent of Europe’s LNG imports last year came from the hurricane-prone Gulf of Mexico. With the Atlantic storm season running until November, supply disruptions remain a live threat.
