Wood Mackenzie warns that historically low European gas storage, renewed disruption in the Strait of Hormuz, strong Asian LNG demand and limited new supply growth have pushed spot prices more than 50% above their June lows and put winter 2026/27 supply security at risk.
MONTREAL (Oil Monster): Wood Mackenzie’s analysis published 23 July 2026 warns that European gas storage at a historically low level, combined with renewed Strait of Hormuz disruption, has driven spot prices more than 50% above their June lows and placed winter 2026/27 supply security at risk.
Three pressures are bearing down at once. Storage across Europe stands at just above 50%, a historically low level for late July. Asian LNG demand has returned to 2025 levels, despite the shortfall in Qatari volumes, sharpening competition with Europe for available cargoes. And there is limited new LNG supply growth over the next 12 months: Qatari developments are not expected back at full capacity before 2H27.
Considering a hypothetical ‘best case’ scenario assuming Qatar reaches full operational capacity by end of September, excluding damaged trains, Wood Mackenzie's analysis suggests European storage reaches 75% at best by 1 November. The five-year average for that date is 90%.
Should the Strait remain closed for a further two months, storage will end up lower than 70%. Prices would rise further and some emerging Asian economies, already strained by high LNG costs, face demand destruction.
“Low European inventories, strong Asian demand and limited new LNG supply growth almost guarantee elevated prices through this winter and into 2027,” said Massimo Di Odoardo, Vice President, Gas and LNG Research at Wood Mackenzie.
Key findings from the analysis include:
Wood Mackenzie points to historically low European gas storage just above 50% for late July and renewed Strait of Hormuz disruption, which together have pushed spot prices more than 50% above their June lows and threaten winter 2026/27 supply security.
The analysis cites low European inventories, Asian LNG demand returning to 2025 levels despite reduced Qatari volumes, and limited new LNG supply growth over the next 9–12 months, with Qatari developments not back at full capacity before 2H27.
In a best-case scenario where Qatar reaches full operational capacity by end-September (excluding damaged trains), Wood Mackenzie estimates European storage would reach only 75% by 1 November, compared with a five-year average of 90%.
If the Strait remains closed for a further two months, Wood Mackenzie expects European storage to end up below 70%, with prices rising further and some emerging Asian economies facing demand destruction as high LNG costs curb demand.
The analysis suggests the LNG market might only rebalance from 2028, as sustained disruption or new geopolitical risks could reduce both the duration and the depth of the anticipated global LNG oversupply.
Courtesy: www.lngindustry.com
