Europe's gas reserves face ultimate test as 2025 looms

With 2025 fast approaching, Europe’s gas reserves are set to be tested once again—will they hold up under the pressure, or is the continent on the brink of an energy crisis?

Bloomberg highlights in a recent article that since the invasion of Ukraine, Europe’s natural gas reserves have become a focal point of concern as the war has caused a sharp reduction in Russian gas deliveries to the region. The European Union’s network of gas storage facilities, now the second largest in the world behind the US, has become an essential buffer against supply disruptions and price hikes.

In response to the decline in Russian pipeline gas, the EU managed to avoid a winter supply crisis by cutting overall gas consumption and boosting imports of liquefied natural gas (LNG) from countries like the US, Qatar, and even Russia. However, experts warn that 2025 could present even greater challenges.

Adverse weather conditions have led Europe to deplete its gas reserves more rapidly this winter, and fluctuating price dynamics have made it less economical to replenish inventories during the summer months. While concerns over immediate supply shortages have eased somewhat, uncertainty over future market conditions remains.

A potential peace deal between Russia and Ukraine could reopen the pipeline gas route to Europe, but it remains uncertain whether the EU would resume Russian gas imports. With growing focus on energy security, many EU nations are reluctant to risk returning to dependence on Moscow for their energy needs.

During the winter months, Europe is heavily reliant on its gas reserves as consumption typically doubles due to increased heating demand. Although suppliers from Norway, Algeria, Qatar, and the US typically ramp up production, the increased demand is not fully met. As a result, stored gas covers about 30 per cent of the EU’s daily winter needs, with this figure rising above 50 per cent during particularly cold days or when renewable energy output is low. During major supply disruptions, such as the gas disputes between Russia and Ukraine in 2006 and 2009, this proportion has been even higher.

In the summer, gas consumption decreases as heating demand drops, and energy demand from air conditioners remains relatively low compared to other regions like the US or Asia. Even though fuel producers use the warmer months for maintenance and repairs, leading to a drop in global production, Europe still enjoys a surplus of supply, which can be stored in underground facilities.

The volume of gas stored depends on market dynamics, including gas prices and demand in other regions like Asia and Latin America. Since Russia’s substantial supply cuts to Europe in 2022, the EU’s reliance on the global gas market has grown significantly, further highlighting the need for strategic energy policies moving forward.

By Naila Huseynova