The European Union is facing the lowest natural gas reserves since 2022 amid the war in Iran, resulting in prices over 90% higher than at the start of 2026, while Brent crude from the North Sea “flirted” with $110 per barrel on Wednesday afternoon. At the same time, Moody’s warns that, according to their models, the probability of a recession in the U.S. economy has risen to 49–50% over the next 12 months.

Natural gas reserves in Europe have fallen below 30% of total storage capacity since March due to higher consumption from a colder-than-expected winter. Meanwhile, in the U.S., the stock market price of gasoline is $3.20 per gallon, the highest since July 2022, when Russia’s invasion of Ukraine triggered a global energy crisis.

Today, the deterioration is directly linked to developments in the Middle East. Iran’s attacks have effectively led to the closure of the Strait of Hormuz, a critical maritime route through which a significant share of global liquefied natural gas (LNG) passes. Israel’s recent airstrikes on the world’s largest gas field pushed prices in the European market (TTF) to a range of €54.5–55.7 per MWh, compared with $26–27 per MWh in early December.

Behind-the-scenes pressures – What Politico writes

Behind the scenes, officials and energy industry representatives warn that, if rules are not adjusted, EU countries may simultaneously move to replenish their reserves, Politico reports. Such a scenario could lead to a sudden surge in demand, allowing traders to exploit the situation and drive prices up once again.

A similar dynamic occurred in 2022, when natural gas prices exceeded €300 per megawatt-hour, as the sharp increase in demand combined with reduced Russian supplies created extreme market instability.

At the same time, Europe must contend with demand from Asia, which relies heavily on maritime LNG flows directly affected by developments in the Persian Gulf. This may further push prices higher over the year, reducing incentives for gas storage during the summer months.

In this context, Politico reports, several European governments are already considering using existing exemptions that allow relaxation of storage targets to limit the risk of mass buying. Some member states are proposing even more flexible solutions, such as reducing the storage fill target by up to 30% or creating a new European coordinated gas purchasing mechanism.

Officials note that such an approach could reduce market pressure. “With a lower target, we would not drive demand for excessively high storage levels, nor push prices upward,” a source familiar with the discussions told Politico.

Efforts to downplay the risk

In public statements, some governments are trying to reassure citizens. In Germany, for example, reserves stand at around 22% of capacity, but political leaders are attempting to downplay the risk. Others openly express concern. Industry representatives warn that the current system does not adequately ensure energy security, as “incentives to fill storage remain insufficient.”

At the same time, the European market faces another obstacle: strict regulations governing LNG trade. Unlike pipeline gas, LNG shipments go to the highest bidder, making Europe less attractive to exporters during periods of intense competition and further limiting the bloc’s ability to secure necessary fuel in an increasingly constrained market, Politico concludes.