Economy

EU’s Winter Energy Gamble: How LNG Dependence, Led by the U.S., Redraws the Continent’s Gas Map

Europe‘s LNG imports surge, U.S. to dominate supply as storage dips. Prices may rise, storage to a 7-year low.

October 6, 2025, 4:29 PM

An LNG tanker sails on the ocean under a cloudy blue sky

A large LNG tanker is captured in a starboard side frontal view, sailing on the ocean under a blue sky with clouds. By Tommy Chia SG / Shutterstock.com.

Executive Summary

Europe faces a deepening reliance on liquefied natural gas (LNG) imports, particularly from the United States, to meet its winter energy demands, with LNG projected to account for 48% of the EU’s total gas supply this year.

The United States is set to become the dominant LNG supplier, providing around 70% of Europe’s LNG between 2026 and 2029, a dependency that sparks unease despite limited alternatives, partly due to past actions by the Trump administration.

The shift to LNG introduces greater price volatility and external risks, while European gas storage levels are at 82.75% capacity, lower than last year and projected to fall to a seven-year low of 29% by March 2026, posing a significant risk premium for 2026.

The Story So Far

Europe’s deepening reliance on liquefied natural gas (LNG) imports, predominantly from the United States, is a direct consequence of significantly reduced pipeline flows from Russia and Algeria, declining domestic production, and lower gas storage levels. This dependency is set to intensify as the EU plans to ban Russian LNG and gas in the coming years, solidifying the U.S.’s role as a critical supplier despite past trade tensions, such as those under President Trump, and introducing greater market price volatility compared to traditional long-term contracts.

Why This Matters

Europe’s deepening reliance on U.S. liquefied natural gas (LNG) to compensate for reduced pipeline flows and declining domestic production fundamentally alters its energy security landscape, making it more vulnerable to volatile global spot markets and potentially leading to higher, less predictable energy prices, while also risking critically low gas storage levels by next spring, which could introduce a substantial risk premium to EU gas prices in 2026.

Who Thinks What?

European utility executives acknowledge their deepening reliance on LNG imports, especially from the United States, as a necessary measure to meet energy demands due to declining pipeline flows and domestic production, despite past tensions over tariffs.

The United States is projected to become an even more critical supplier of Europe’s LNG, with expanding production and export capacity solidifying its role in European energy security.

Analysts like Arne Lohmann Rasmussen, Florence Schmit, and Energy Aspects highlight that the shift towards LNG introduces greater price volatility, external risks from fluctuating demand, and predicts potentially low gas storage levels by winter’s end, which could lead to a significant risk premium for EU gas prices in 2026.

Europe faces a deepening reliance on liquefied natural gas (LNG) imports, particularly from the United States, to meet its energy demands this winter, driven by lower gas storage levels and reduced pipeline flows from Russia and Algeria. Analysts project the continent will require up to 160 additional LNG cargoes, totaling approximately 16 billion cubic meters, to navigate the colder months, pushing total LNG imports to 820 tankers this year, up from 660 in 2024. This surge means LNG will account for 48% of the EU’s total gas supply, a significant increase from just 10% a decade ago and 23% in 2021.

Growing U.S. Dominance in EU LNG Supply

The United States is poised to become an even more critical supplier, with projections indicating it will provide around 70% of Europe’s LNG between 2026 and 2029, an increase from 58% this year. This growing dependency comes as the EU plans to ban Russian LNG from 2027 and Russian gas from 2028. U.S. gas production and export capacity are expanding, while other global suppliers face limitations, solidifying America’s role in Europe’s energy security.

This reliance has sparked some unease, particularly following actions by the Trump administration to impose tariffs on trading partners, including the EU. Despite these tensions, European utility executives acknowledge the limited alternatives for securing gas supplies.

Market Dynamics and Price Volatility

The shift towards LNG imports introduces greater price volatility compared to long-term pipeline contracts. Spot LNG prices are subject to external risks, such as fluctuating Chinese demand, which can lead to significant price swings and deter strategic stockpiling. This dynamic complicates Europe’s energy outlook, according to Arne Lohmann Rasmussen, head of research at Global Risk Management.

Meanwhile, Europe’s domestic gas production, particularly from its top supplier Norway, is expected to gradually decline. Imports from Algeria have also fallen, further increasing the need for LNG.

Storage Levels and Winter Outlook

European gas storage levels stood at 82.75% capacity as of October 4, equivalent to 944 terawatt hours. This marks a decrease from 94.32% at the same time last year and represents the lowest level since 2021. Experts predict that by the end of the current winter in March 2026, storage volumes could fall to a seven-year low of 29% of capacity.

Lower pipeline supply and increased reliance on LNG will necessitate more substantial storage withdrawals and injections in the future, according to Florence Schmit, an energy strategist at Rabobank. Such low storage levels could introduce a significant risk premium to EU gas prices in 2026, as noted by Energy Aspects.

Key Takeaways

Europe’s energy landscape is undergoing a significant transformation, characterized by an increasing reliance on LNG, predominantly from the United States, to compensate for reduced pipeline flows and declining domestic production. This shift introduces greater market volatility and places additional pressure on gas storage management, with projections indicating potentially low storage levels by the end of the winter season.