Equinor warns of winter gas price spike risk in Europe

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Equinor warns of winter gas risk

Highlights

Equinor CEO Anders Opedal warns European gas prices could spike this winter due to storage at its lowest early-season level since 2011 and heightened Asian LNG competition.
Benchmark European gas prices have more than tripled this year, hitting 2022 crisis-era highs after Strait of Hormuz disruptions cut about 20% of global LNG supplies.
European gas storage is only 75% full at the heating season's start, while Equinor's Cheniere deal for 1.75 million metric tons annually adds LNG cargoes to its European and global supply.

Low storage levels raise winter supply risk

As reported by Reuters, Equinor Chief Executive Anders Opedal says Europe could face another spike in gas prices later this winter if cold weather increases demand after inventories have been drawn down further. He says storage levels are at their lowest for this time of year since 2011, while Europe is likely to face tougher competition with Asia for limited LNG supplies if temperatures fall.

Opedal says the greatest risk comes toward the end of the heating season, when gas storage is likely to be at its lowest and a cold spell could trigger significant price volatility. He says actual prices are impossible to predict, but warns that the market remains vulnerable to weather-driven demand shocks.

Higher prices support Equinor as Europe stays exposed

The warning comes after Equinor reports its highest quarterly earnings since 2022, largely driven by increases in natural gas and oil prices this year. Europe’s benchmark gas price has more than tripled this year to its highest level since the 2022 energy crisis, after the U.S.-Israeli war with Iran effectively closes the Strait of Hormuz and disrupts about 20% of global LNG supplies.

European gas storage sites are only 75% full at the start of the heating season, a historic low for that point in the year. Norway remains Europe’s largest single supplier of pipeline gas, and Equinor also adds LNG supply through its Hammerfest plant and U.S. sourcing contracts, including a deal with Cheniere for 1.75 million metric tons a year.

Opedal says the Cheniere contract has now started, giving Equinor more LNG cargoes to market. He says some of those volumes go to Europe, while some are delivered to other destinations.

In our earlier article on the Strait of Hormuz shipping disruption, we explained that prolonged uncertainty is already hitting agriculture through higher fuel and transport costs, disrupted fertilizer flows, and more cautious planting decisions that can reduce yields. We noted that agricultural commodity prices had risen and that further increases were expected as supply-chain stress persists, with parts of Asia and Africa facing elevated food-security risks if the disruption drags on.

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