Oil & Gas

From a business perspective, European gas buyers must secure roughly 700 LNG cargoes about 67 billion cubic metres (bcm) to refill storage this summer, around 180 cargoes more than last year. LNG now accounts for a sharply larger share of Europe’s gas mix, rising from about 19% before 2022 to an expected 45% this year, equivalent to nearly 1,800 LNG tankers. With Qatar shutting gas fields that represent roughly one-fifth of global LNG supply, competition for cargoes has intensified. Norway, Europe’s largest pipeline supplier, is already producing at maximum capacity, meaning most incremental demand must be met through LNG purchases at elevated prices.

From an economic standpoint, the cost impact is substantial. Europe’s bill for the additional 180 LNG cargoes has jumped to approximately $10.1 billion from $6.7 billion within days, while the full summer refill requirement is now estimated to cost about $40 billion ] an increase of roughly $13.6 billion. Benchmark European gas prices briefly hit their highest levels since early 2023 and have surged nearly 50% in a week. The global LNG benchmark, the Japan-Korea Marker, rose as much as 68%, reflecting intense global competition. Higher prices may also discourage storage injections if buyers anticipate eventual price declines once tensions ease and new supply comes online.

Geopolitically, Europe’s vulnerability underscores its growing reliance on global LNG markets following the sharp reduction of Russian pipeline gas imports after the 2022 invasion of Ukraine. The United States is now Europe’s largest LNG supplier, accounting for more than a quarter of EU gas supply, while Qatar represents a smaller but strategically important share. However, even as new U.S. LNG projects expand capacity, there is limited ability to rapidly replace disrupted Middle Eastern volumes. With European storage projected to stand at just 22–27% full by the end of March well below the five-year average of 41% any prolonged Middle East disruption could deepen energy security risks and reinforce Europe’s exposure to geopolitical shocks in global gas markets.