Europe heads into winter with gas stocks below average and renewed Asian competition for LNG

Donya-e-Eqtesad reports that Europe's energy market has entered a sensitive phase with only a few months left before the cold season, this time not because of a sudden cut in Russian gas but because of several overlapping factors: a slowdown in the filling of gas storage, intense competition with Asia for liquefied natural gas cargoes, the continuing war in Ukraine, and insecurity along West Asian energy transit routes.

After the 2022 crisis, the European Union required member states to fill most of their storage capacity before winter. This year, although injection into storage continues, its pace has slowed and stock levels sit below the average of recent years. The main reasons cited are higher LNG prices, reduced global supply and competition for uncommitted cargoes, and on that basis many analysts doubt Europe's ability to reach its storage targets.

The key difference this year is the return of Asian demand. Rising industrial activity, growth in electricity consumption and Asian countries' efforts to fill their own stocks have again intensified competition to buy LNG. In this market price determines where cargoes go, so Europe must pay more to attract each shipment, a cost that ultimately shows up in electricity, gas and industrial product prices.