Germany's Gas Storage at Lowest Mid-August Level in Years
Germany's underground natural gas storage facilities are barely over half full, standing at 50.14% as of Wednesday, according to Gas Infrastructure Europe, the industry body for the continent's gas grid operators. This is the lowest level for mid-August in several years. Compared with the same date last year, storage is around a quarter lower, and it is more than 45 percentage points lower than in 2023 and 2024, when the country made robust contingency plans due to Russia's war in Ukraine.
The current decline is largely attributed to the ongoing closure of the Strait of Hormuz — described as the world's most critical energy chokepoint — because of the Iran war. European wholesale gas prices remain well above pre-war levels, with the benchmark Dutch TTF standing at around €65 ($76) per megawatt-hour on Thursday, roughly twice as high as the same period last year. Over the past two weeks, the benchmark has risen by nearly a quarter following renewed attacks by the US and Iran.
Market Incentives Dampen Summer Filling
Normally, traders buy gas at low prices during the summer and store it for winter, when it can be sold at a higher price — the summer-winter price spread. This year, however, operators have little incentive to fill storage facilities earlier due to higher prices for natural gas and LNG on world markets stemming from the Iran war disruptions.
Germany relies on private energy trading firms to fill its storage, unlike many other European countries. This has led to criticism from some quarters: Left Party lawmaker Jörg Cezanne told the Rheinische Post that the trading tactic was a "gamble." A spokesperson for Germany's Economy Ministry said they were "urging traders to increase their gas storage levels." The ministry itself does not expect a gas shortage this winter, estimating that filling storage to 60-70% capacity by the start of winter, combined with import capabilities, will meet average winter demand. The ministry also believes that state-backed gas purchases could generate artificial demand, drive up prices, and crowd out private investment, describing the situation as "a tight market situation with high prices is not yet a supply crisis."
Industry and Government Targets at Odds
The German government's target is to reach 71% storage by November 1, but the network operators' association FNB Gas has warned that this is "virtually unattainable." FNB Gas noted that storage rates are currently rising by about 0.5 terawatt-hours per day; even if they reached 1.2 terawatt-hours per day, levels would still be "significantly below" the target.
Germany's low storage levels are not an isolated case. Storage facilities in the Netherlands, Belgium, Slovakia, Sweden, and Latvia are also under 50% full. Across the European Union, the average storage level was 61% as of Wednesday, down nearly 17% from the same time last year.
Consumer Impact and Advice
Ramona Pop, of the Federation of German Consumer Organizations, urged consumers to check for fixed-price contracts to shield themselves from potential price spikes. Comparison portal Verivox warned that new consumer contracts are up and could add around €400 annually for a typical home.
Outlook
The situation underscores the fragile balance between market incentives and energy security in Europe. While the German government maintains that no shortage is expected this winter, the gap between current storage levels and the official target raises questions about preparedness. As the Strait of Hormuz closure continues to disrupt global gas flows, both traders and policymakers face difficult choices in the months ahead.