Wood Mackenzie's Structural Deficit Warning

In its analysis published July 27, 2026, Wood Mackenzie warned that European gas storage is at risk of finishing the injection season below 70% . The consultancy identifies three converging pressures:

• Historically low storage combined with the Hormuz disruption has driven spot prices more than 50% above their June lows .
• Recovering Asian LNG demand is pulling flexible cargoes away from Europe .
• Low inventories could keep prices elevated through the entire winter of 2026/27 .

Wood Mackenzie has also described the situation as a structural deficit, not a temporary shock, noting that even before the Hormuz crisis, Europe's gas market was fundamentally undersupplied after the loss of Russian pipeline gas .

Strait of Hormuz Blockade: LNG Supply & Price Impact

The Strait of Hormuz has been effectively closed since February 28, 2026, following the outbreak of the Iran war . Key impacts:

• ~20% of global LNG supply normally transits the Strait; that flow has been nearly halted .
• Iranian strikes knocked out ~17% of Qatar's LNG export capacity at the Ras Laffan facility .
• The World Bank's natural gas price index rose 24% month-on-month in March 2026 .
• TTF futures (European benchmark) reached $14.80/MMBtu by late April .
• Shell reported that global LNG trade will be flat in 2026, with roughly one-fifth of monthly supply shut in since March .
• Prices spiked sharply but stayed below the 2022 crisis peaks .
• In June 2026, global LNG supply actually grew 2% year-on-year despite the disruption, as US and other non-Middle East producers ramped up .

Intensifying Competition with Asian Buyers

The Hormuz crisis has created a bidding war for flexible LNG cargoes between Europe and Asia:

• Asian LNG demand is recovering, and the Asian price premium over European prices has soared, redirecting available spot cargoes toward Asian importers .
• South Asian buyers, heavily dependent on Qatari LNG, are finding it extremely difficult to replace disrupted volumes, with spot prices exceeding $20/MMBtu in that market .
• Wood Mackenzie notes that low European storage and Asian demand recovery are combining to keep the global LNG market extremely tight through winter .

Timeline for New LNG Supply and Market Rebalancing

Wood Mackenzie's longer-term outlook projects a wave of new LNG supply, primarily from the US, expected in the late 2020s. Their baseline forecast sees European traded gas prices almost halving by 2030, falling to an average of €24/MWh (~$8/MMBtu) . Shell similarly expects LNG trade growth to resume in 2027 once the Hormuz disruption is resolved . However, a full rebalancing depends on the Strait reopening — if the crisis persists through end-2026, Wood Mackenzie warns of a shallow global recession in H2 2026 .

Long-Term Potential: Renewables and Heat Pumps by 2030

The structural solution for Europe's gas dependency is centered on electrification and efficiency:

• The IEA predicts heat pumps will lower Europe's gas demand for building heating by at least 21 billion cubic meters (bcm) in 2030 .
• The EU's Joint Research Centre finds that replacing 30 million fossil fuel boilers (about 35% of the total) with heat pumps would cut gas and oil consumption in those dwellings by 36% .
• The European Climate Foundation estimates that an ambitious rollout of 60 million heat pumps by 2030 could reduce the EU's gas demand in buildings by 40% compared to 2022, saving €60 billion in import costs .
• Current clean heat stock (heat pumps, district heating, solar thermal) already replaces 42.5 bcm of gas imports per year, and this could grow to 74.6 bcm by 2030 .
• However, deployment is falling short: the European Heat Pump Association warns the 60 million heat pump target is at risk, with current installation rates needing to triple to stay on track .

Wood Mackenzie's Structural Deficit Warning

In its analysis published July 27, 2026, Wood Mackenzie warned that European gas storage is at risk of finishing the injection season below 70% . The consultancy identifies three converging pressures:

• Historically low storage combined with the Hormuz disruption has driven spot prices more than 50% above their June lows .
• Recovering Asian LNG demand is pulling flexible cargoes away from Europe .
• Low inventories could keep prices elevated through the entire winter of 2026/27 .

Wood Mackenzie has also described the situation as a structural deficit, not a temporary shock, noting that even before the Hormuz crisis, Europe's gas market was fundamentally undersupplied after the loss of Russian pipeline gas .

Strait of Hormuz Blockade: LNG Supply & Price Impact

The Strait of Hormuz has been effectively closed since February 28, 2026, following the outbreak of the Iran war . Key impacts:

• ~20% of global LNG supply normally transits the Strait; that flow has been nearly halted .
• Iranian strikes knocked out ~17% of Qatar's LNG export capacity at the Ras Laffan facility .
• The World Bank's natural gas price index rose 24% month-on-month in March 2026 .
• TTF futures (European benchmark) reached $14.80/MMBtu by late April .
• Shell reported that global LNG trade will be flat in 2026, with roughly one-fifth of monthly supply shut in since March .
• Prices spiked sharply but stayed below the 2022 crisis peaks .
• In June 2026, global LNG supply actually grew 2% year-on-year despite the disruption, as US and other non-Middle East producers ramped up .

Intensifying Competition with Asian Buyers

The Hormuz crisis has created a bidding war for flexible LNG cargoes between Europe and Asia:

• Asian LNG demand is recovering, and the Asian price premium over European prices has soared, redirecting available spot cargoes toward Asian importers .
• South Asian buyers, heavily dependent on Qatari LNG, are finding it extremely difficult to replace disrupted volumes, with spot prices exceeding $20/MMBtu in that market .
• Wood Mackenzie notes that low European storage and Asian demand recovery are combining to keep the global LNG market extremely tight through winter .

Timeline for New LNG Supply and Market Rebalancing

Wood Mackenzie's longer-term outlook projects a wave of new LNG supply, primarily from the US, expected in the late 2020s. Their baseline forecast sees European traded gas prices almost halving by 2030, falling to an average of €24/MWh (~$8/MMBtu) . Shell similarly expects LNG trade growth to resume in 2027 once the Hormuz disruption is resolved . However, a full rebalancing depends on the Strait reopening — if the crisis persists through end-2026, Wood Mackenzie warns of a shallow global recession in H2 2026 .

Long-Term Potential: Renewables and Heat Pumps by 2030

The structural solution for Europe's gas dependency is centered on electrification and efficiency:

• The IEA predicts heat pumps will lower Europe's gas demand for building heating by at least 21 billion cubic meters (bcm) in 2030 .
• The EU's Joint Research Centre finds that replacing 30 million fossil fuel boilers (about 35% of the total) with heat pumps would cut gas and oil consumption in those dwellings by 36% .
• The European Climate Foundation estimates that an ambitious rollout of 60 million heat pumps by 2030 could reduce the EU's gas demand in buildings by 40% compared to 2022, saving €60 billion in import costs .
• Current clean heat stock (heat pumps, district heating, solar thermal) already replaces 42.5 bcm of gas imports per year, and this could grow to 74.6 bcm by 2030 .
• However, deployment is falling short: the European Heat Pump Association warns the 60 million heat pump target is at risk, with current installation rates needing to triple to stay on track .