Europe's Gas Storage Is Draining: What Gazprom Says About Prices

I read the November Gas Infrastructure Europe statistics twice. Europe has entered winter with the lowest autumn storage peak in the history of the data, and Germany has fallen below 60% faster than ever before. Where did the hole come from? Why is Moscow talking about $2,500 when the market trades at roughly half that? And who actually benefits from a cold snap that has not yet arrived?

What the First Days of November Showed

According to Gazprom, citing GIE, EU countries have set a new record for daily withdrawals from storage. On November 6, German withdrawals exceeded the previous record for that date by 58.7%, or 37 million cubic meters, and storage levels dropped to 59.97%.

Across the EU, storage peaked on October 27 at 74.96% and has been falling since. That is the lowest level at the start of winter since 2011. The previous low, 77.5%, came in October 2021, on the eve of the 2022 crisis. On November 8, stocks stood at 73%, which is 13% below a year earlier. Reuters adds that Germany accounts for more than a fifth of European storage capacity, and that it missed its own 70% target for November 1: it reached 61%, against an EU average of 74.56%.

Why the Hole Is So Deep

I see two causes. The first is easy to name: the war in the Middle East. Before it began, about a fifth of the world's LNG passed through the Strait of Hormuz. Qatari supplies are now sharply curtailed, and QatarEnergy has extended force majeure until at least the end of December. Asia is also scrambling for gas, and spot LNG prices there remain near four-year highs, as S&P Global notes.

The second cause is more frustrating, because it was avoidable. This summer, injecting gas was unprofitable: winter futures did not cover storage costs, so traders waited. Reuters quotes market analysts to this effect. Germany, where injections are managed by commercial companies, suffered more than anyone. Berlin and Rome are now working on the problem, and they have already clashed over how to share the stocks.

The International Energy Agency has laid out a range. In the worst case (Hormuz closed, a cold winter, weak wind), EU storage would be just 7% full by the end of March. Even with a mild winter and the strait reopening in January, stocks would end up 18% below the five-year average.

What the $2,500 Figure Really Means

I read Gazprom's statement carefully. Alexey Miller suggested that in a harsh winter the European price could reach $2,500 per thousand cubic meters. He added that the Western experts' forecast of $1,200 was already exceeded in October. On the TTF exchange, prices rose to €104.6 per megawatt-hour on October 31 and November 1, the highest since December 2022. They then retreated to €86 and traded around €87 on Monday.

I converted this into the units we are used to. At current exchange rates, €87 per megawatt-hour is roughly $1,000–1,050 per thousand cubic meters. Reaching $2,500 would require a price of about €210, or twice today's level. Morgan Stanley expects an average of €85 this winter and keeps a bullish scenario of €130 in reserve. Sergey Suverov of Arikapital considers $1,400–1,600 possible in a mild winter and $2,000–2,500 in a harsh one. I would call Miller's statement a description of the tail of the distribution. But a tail is a tail: it shows how thin the ice is.

My Forecast for Europe and Its People

December. The weather will decide everything. If moderate warmth holds, withdrawals will slow, and I expect TTF in a range of €75–90. If sustained cold arrives in northwestern Europe, Germany will hit its limit first. I put the probability that its storage falls below 40% by the end of December at about 35%.

January and February. In my base case, prices run between €80 and €110, with periodic spikes on news from Hormuz and a partial recovery of Qatari shipments. In the alternative scenario, US–Iran talks mediated by Qatar collapse and the winter turns cold, pushing prices to €130 and above. Warning signs would be a new disruption of shipping in the strait, or an extension of Qatar's force majeure beyond January. Countries would then begin dividing gas among themselves, and the question of how to allocate stocks would become political.

What people will feel. The bill will arrive in two stages. First, household tariffs will rise, because retail prices follow wholesale with a lag of months. Then industry will be hit: plants where gas makes up a large share of costs, from chemicals to glass, will cut output if expensive gas persists. Some will lose a shift, others their jobs. For the Baltic states, the winter will mean higher utility costs and more expensive energy-intensive goods.

Summer 2027. After storage has been emptied, massive injections will be needed, which will keep demand and prices elevated. The IEA explicitly warns that market tightness will stretch into next year. I would not be surprised if storage levels in 2027 become the main dispute inside the EU.

What Russia Gets

I would not rush to call this a direct gain. Little Russian gas is physically left on the European market, and today's shortfall is being covered by American and other LNG. Higher prices therefore do not automatically turn into Russian revenue. Europe is also preparing to shut off what remains: according to Merca2, the sanctions package of January 26 bans purchases of Russian LNG from 2027, covering more than 200 cargoes and about 15% of import volumes.

By my calculation, Moscow's gain is indirect. High global prices raise the value of Russian LNG on the Asian route, where it is being redirected. The shortage strengthens voices in Europe calling for a review of the ban. I put the probability of a softening or postponement during 2027 at about 40%, and higher if the winter is harsh. Finally, Gazprom has gained an information advantage: its $1,200 forecast proved too low, and every statement it makes is now cited differently.

The risks, however, are real. If Hormuz reopens faster than expected and Qatari LNG returns, TTF could fall to €50–60, and Moscow's argument would vanish. Meanwhile, oil has dropped below $95 since the US elections, which hits the Russian budget. Russian gas companies will have to hold on to Asian markets while the European window closes. Cold in Europe gives them a breather, but it does not cancel the shifts in the factors that ultimately decide the outcome.