IEA Expects Tight Gas Market in 2027, With ‘Record Low’ Winter Stocks

The International Energy Agency (IEA) says the tight situation on the global natural gas market could persist well into next year. In a report published in Paris on Tuesday, IEA experts anticipate that European gas reserves will fall to a “record low” over the course of the winter.

After the winter, the subsequent replenishment of gas storage facilities is expected to drive high demand, which is likely to coincide with a market situation that remains tense due to the consequences of the war in Iran.

IEA simulations show that gas storage levels in the European Union could fall to below 10% by the end of March.

However, this would apply only in a worst-case scenario, in which there are further disruptions to liquefied natural gas (LNG) supplies through the Strait of Hormuz and the weather is also unusually cold.

The IEA says the European natural gas market would be vulnerable to cold snaps towards the end of winter, which could lead to even greater price volatility by the end of the heating season.

“Europe’s low storage levels could also substantially increase the need for injections to replenish inventories through summer 2027, which could extend global market tightness well into the coming year,” the IEA said in a press release.

The price of natural gas has more than tripled this year due to the US’s war with Iran, including the blockade of the Strait of Hormuz.

The price of European natural gas rose significantly on Tuesday following reports of renewed US military strikes on targets in Iran.