Europe’s Gas Prices Are Rising Again — and the Strait of Hormuz Is Part of the Problem

Gas markets often price scarcity months ahead of actual shortages. When traders believe storage will be difficult or expensive to refill, prices rise immediately to secure supply early in the injection season.

Europe Started the Year With Unusually Low Gas Storage

The price spike is amplified by the state of Europe’s reserves. After the winter heating season, Europe entered the 2026 storage refill period with significantly depleted inventories.

Europe has about 110 billion cubic meters (bcm) of gas storage capacity, yet only about 31 bcm remained in storage earlier in the year—the lowest level since 2018 . By mid‑May, storage was still only around 34% full, far below the levels typically required to comfortably reach winter targets .

This creates a demanding refill challenge. To reach the EU’s target levels before the heating season begins, Europe must inject large volumes of gas during the April‑to‑October injection period.

The Strait of Hormuz and Why It Matters for LNG

The Strait of Hormuz is one of the world’s most critical energy chokepoints. A large share of global LNG shipments—including exports from Qatar—passes through this narrow waterway.

Geopolitical conflict in the Middle East has disrupted shipping and threatened LNG flows, raising concerns about the availability of cargoes for global buyers . Some reports indicate that hostilities and attacks on infrastructure have already curtailed part of Qatar’s export capacity and slowed shipping through the strait .

Because roughly one‑fifth of global LNG supply moves through Hormuz, even partial disruption can tighten the global gas market and push prices higher .

Why LNG Disruptions Make Europe’s Storage Refill Harder

Europe’s storage system functions as a seasonal buffer: gas is injected during warmer months and withdrawn during winter demand peaks. But rebuilding reserves requires steady access to flexible supply.

If LNG shipments from the Gulf are delayed, restricted, or diverted to other markets, Europe must compete more aggressively for available cargoes. That often means bidding higher prices to attract shipments from the Atlantic Basin or other suppliers.

Even when physical shortages do not occur, the competition for LNG can drive significant price volatility and make storage injections slower or more expensive .

The Structural Shift Behind the Problem

The deeper issue is structural. Over the past several years, Europe dramatically reduced its reliance on Russian pipeline gas and replaced much of it with liquefied natural gas imports.

This transition increased supplier diversity and reduced dependence on a single pipeline system. But it also fundamentally changed how Europe secures gas.

Pipeline gas flows through fixed infrastructure with long‑term contracts and relatively stable transport routes. LNG, by contrast, moves through a global shipping market influenced by:

• tanker availability
• liquefaction plant outages
• maritime chokepoints
• global demand competition

As a result, Europe’s gas supply is now tied more tightly to global energy markets and geopolitical risks affecting shipping lanes and LNG exporters .

The New Reality: Security Through Price

In the new LNG‑driven system, Europe can usually attract supply when the market tightens—but typically by paying more than other buyers. That means energy security increasingly depends on price signals rather than guaranteed pipeline volumes.

When storage is low and supply risks rise, the market reacts quickly with higher prices, as seen in the recent move above €50/MWh.

What Happens Next

The severity of Europe’s gas challenge will depend on several factors over the coming months:

• whether shipping disruptions in the Strait of Hormuz ease
• how quickly LNG supply from Qatar and other exporters normalizes
• summer weather and demand conditions
• Europe’s ability to attract sufficient LNG cargoes

EU authorities say infrastructure is capable of refilling storage to at least 80% by November, but this depends heavily on LNG supply availability during the injection season .

That uncertainty means Europe is entering one of its most complex storage refill seasons in years—one where geopolitical events thousands of kilometers away can quickly reshape the continent’s energy outlook.