Anabelle Colaco
14 Oct 2026

OSLO, Norway: European households and businesses could face elevated gas prices for at least another year as record-low storage reserves leave the region needing to rebuild supplies even if the Iran war ends and the winter is mild.

European benchmark gas prices have climbed more than 150 percent this year as disruptions to shipping through the Strait of Hormuz trapped almost 20 percent of global liquefied natural gas exports from Qatar and the United Arab Emirates, most of which are destined for Asia.

Although the U.S., Canada and Nigeria have increased exports, the loss of Middle Eastern LNG has increased competition for spot cargoes that might otherwise have been available to Europe and made it harder to replenish storage during the summer.

Analysts expect European gas storage to be 75 percent to 78 percent full by November 1, about 10 percentage points below the five-year average.

Even with average winter weather, northwest European reserves could fall to around 20 percent by early April. Combined with a prolonged closure of the Strait of Hormuz, that could increase pressure to replenish reserves in 2027, LSEG analyst Yuriy Onyshkiv said.

"It's not just this coming winter that we are tight, but we risk being tight the next summer," he said.

Storage typically supplies 25 percent to 30 percent of the gas consumed in the EU during winter, leaving the bloc heavily reliant on pipeline supplies and LNG, particularly from Norway and the U.S.

ABN Amro senior energy economist Moutaz Altaghlibi said Europe was not facing an outright supply shortage but lacked a sufficient operational buffer. A cold winter could reduce storage to 10 percent to 15 percent, which he described as "very critical and challenging" for the next refilling season.

While most analysts do not expect a repeat of the 2022 energy crisis, when European benchmark prices exceeded 350 euros per megawatt-hour, a rise above 100 euros/MWh — around 25 percent above current levels — is considered possible.

Consumers are expected to feel more of this year's wholesale price increases in 2027 as fixed retail contracts are renewed.

In Germany, gas tariffs for new customers have already risen 55 percent this year, from eight euro cents to 12.4 euro cents per kilowatt-hour, according to price comparison website Verivox.

"Given current market prices, increases of 10 to 20 percent are realistic," a Verivox spokesperson said.

Britain's household energy price cap, which rose to a three-year high in October, could increase another 16 percent in January, according to consultancy Cornwall Insight.

"At the moment, we can't yet see an end to the volatility, and with gas stocks as low as they are, the effects of the (Iran) conflict could be with us for many more months," principal consultant Craig Lowrey said.

European industries are also struggling with energy costs, with EU gas prices already three times those in the U.S.

The EU's full ban on Russian LNG imports from January 2027 is expected to further tighten supplies.

Even if the U.S.-Iran conflict is resolved during the winter, rebuilding Europe's reserves could keep pressure on the market. BNP Paribas commodities analyst Jason Ying said normalization would take time.

"We expect normalization of the market to pre-conflict levels won't come until 2028," Ying said.