March 09, 2026 [Oil Price]- The European Union’s gas in storage levels are below 30%, benchmark gas prices are the highest in over a year, and QatarEnergy just shut down the world’s single biggest LNG production facility. The situation looks like a recipe for disaster, and the chances of a painless solution are slim.

EU’s benchmark natural gas price has gained as much as 60% since the United States and Israel started bombing Iran on Saturday, and while some of these gains were erased this week, significant upside potential remains. Not only has QatarEnergy suspended LNG production and declared force majeure on exports, but insurers’ refusal to provide coverage for vessels traversing the Strait of Hormuz, along with Iranian warnings that enemy vessels will be legitimate targets, has resulted in severe disruption of tanker traffic in the chokepoint.

Of course, the EU could always lean more heavily on American liquefied gas. After all, it even made a commitment to buy $250 billion worth of it and oil annually until 2028 as part of the trade deal European Commission president Ursula von der Leyen signed with President Trump last summer. This is what it will likely have to do, in the absence of Qatari LNG for an unknown period of time. But there is a problem with that, and the problem is the price.

Liquefied natural gas is more expensive than pipeline gas to begin with. This was one reason why European industries have had a tough four years since the sabotage of the Nord Stream and the consequent drop in Russian gas flows to the continent. Alternative pipeline gas supplies from Northern Africa and Azerbaijan have yet to ramp up enough to replace the lost flows. And this year’s heating demand has been much stronger than the last four years.

Bloomberg sounded the alarm as early as January, reporting that below-average winter temperatures were driving the fastest pace of withdrawals from natural gas storage in Europe in five years, as heating demand soared. The gap between demand and supply was so significant that LNG cargo arrivals were at less than half of the daily volumes withdrawn from storage. What’s more, at the time and over the next month, the unfavorable price spread between winter and summer prices did not encourage early stockpiling.

This means that now, European energy buyers would need to revise their gas purchase plans for refill season—and their price assumptions. Reuters cited Kpler as saying the European Union would need LNG deliveries equivalent to 67 billion cu m just to refill gas storages. That would be equal to some 700 cargoes, the publication noted, or 180 cargoes (17 billion cu m) more than it needed last year.

These volumes are no small potatoes—especially with a war premium attached to them. Even if the war in the Middle East ends this week, restarting QatarEnergy’s LNG production would take more than a few days. In other words, whatever happens in the Middle East, the EU will be paying through the nose for its gas—because it has no alternative. Reuters has calculated that the additional cargoes would swell the EU’s LNG import bill by over $10 billion, per current prices. The full refill bill, according to the publication, could hit $40 billion. That’s a far cry from the $250 billion committed, and even that far cry would hit European industries.

Before 2022, Russia’s Gazprom notoriously supplied almost 40% of the European Union’s gas at the peak of deliveries. By last year, this had fallen to less than 20%, pumped through the one remaining operating pipeline, the TurkStream. Now, the EU has decided to suspend all Russian energy imports starting in 2027, including, notably gas, both pipeline and LNG. In the meantime, however, European buyers are in a rush to secure as much Russian LNG as possible, turning the country into its second-largest LNG supplier, after the United States. The rather ironic situation may also get a twist, after Russia’s president said parliament would discuss pre-empting the EU and suspending gas exports itself, given the presence of alternative markets and the EU’s own plans for an end to these exports.

This would only hasten an already deep dependence on American liquefied gas in Europe that has started to cause concern—after being celebrated as energy independence back in 2022. The problem is that, besides Russia, there is no gas producer large enough to serve as a source of stable diversification of supply. The situation will likely boost the appeal of wind and solar capacity, but that appeal has limits, too, because neither wind nor solar are as cheap as advertised when the costs of backup generation and battery storage are included in the tally. In short, the European Union is facing even more uncertain times than it has been struggling with for four years now.