Evaluating the Resilience of European Gas Markets in the 2025/26 Winter Season

The European Union's gas markets have entered the 2025/26 winter season with a level of preparedness that underscores years of strategic adaptation following the energy crisis. With gas storage levels reaching 83% by October 1, 2025, the EU has demonstrated resilience in the face of potential supply disruptions, particularly after phasing out Russian pipeline gas imports. This level of preparedness, comparable to pre-crisis benchmarks, has alleviated immediate market concerns but has not eliminated the complexities of balancing short-term security with long-term investment risks.

Strategic Storage and Supply Resilience

The EU's high storage levels are a direct result of coordinated efforts to diversify gas imports and enhance infrastructure flexibility. According to the latest Winter Supply Outlook by the European Network for Transmission System Operators for Gas (ENTSOG), the bloc is well-positioned to maintain storage at 35% by the end of winter, ensuring a robust foundation for summer refilling. This strategy leverages liquefied natural gas (LNG)

imports as a critical buffer, with the system capable of scaling up deliveries to offset shortfalls even under severe weather conditions.

However, the resilience of this model hinges on continued diversification. While the EU has reduced its reliance on Russian gas, the risk of over-dependence on alternative suppliers-such as the U.S. or Qatar-remains. As noted by the Bruegel think tank, maintaining strategic flexibility in supplier selection is essential to avoid vulnerabilities in the event of geopolitical or logistical shocks.

Price Volatility and Speculative Pressures

Despite the strong fundamentals, European gas markets face growing risks of price volatility. Investment funds have turned bearish, with speculative positioning shifting from a net long of 15.6 terawatt-hours (TWh) to a net short of 11.4 TWh by late 2025. This shift, the first net short position since March 2024, reflects growing skepticism about the long-term demand for gas in a decarbonizing economy.

The inversion of the summer 2025–winter 2025 price spread further complicates market dynamics. As S&P Global Commodity Insights highlights, this inversion signals weak economic incentives for storage operators to fill reserves during the summer, potentially leading to lower-than-expected storage levels ahead of the 2026/27 winter. Such scenarios could trigger sharp price swings if unexpected disruptions-such as a colder-than-average winter or LNG supply bottlenecks-arise.

Investment Risks and Policy Interventions

The interplay between market forces and regulatory frameworks will shape investment risk in European gas storage. While 14 EU countries have incorporated storage into their national energy plans and offer financial incentives like capacity market contracts and power purchase agreements (PPAs), the economic viability of storage projects remains under pressure. Wood Mackenzie's analysis underscores that regulatory support is critical to de-risking investments in storage infrastructure. Capacity markets and auctions, for instance, provide revenue stability for operators, but their effectiveness depends on consistent policy alignment with decarbonization goals. Conversely, the lack of clear long-term signals from policymakers could deter private capital from entering the sector.

Conclusion: Balancing Short-Term Security and Long-Term Transition

The EU's gas markets have made significant strides in securing winter resilience, but the path forward requires careful navigation of competing priorities. High storage levels and diversified imports have mitigated immediate supply risks, yet speculative positioning and economic headwinds highlight the fragility of this stability. Investors must weigh the short-term benefits of strategic storage against the long-term uncertainties of a transitioning energy system.

For policymakers, the challenge lies in maintaining this balance. Strengthening regulatory frameworks to support storage economics while accelerating the shift to renewable energy will be key to ensuring both market resilience and climate objectives. As the EU moves into the 2026/27 winter, the lessons of the 2025/26 season will serve as a critical test of its ability to adapt to an evolving energy landscape.