Why are Germany's gas storage levels so low?
Germany's gas storage facilities are only 50% full as traders bet that wholesale prices will fall if the Iran war ends. With around three months until winter, DW asks whether the country can refill its reserves in time.
Germany's gas storage levels are alarmingly low, with facilities holding only 50.14% of their capacity as of Wednesday. This is the lowest level for mid-August in several years, more than a quarter lower than the same time last year, and over 45 percentage points lower compared to 2023 and 2024. The ongoing closure of the Strait of Hormuz, a crucial energy chokepoint due to the Iran war, is primarily responsible for the low storage levels.
Unlike many other European countries, Germany relies heavily on private energy trading firms rather than government intervention to fill storage facilities. Market players are betting on lower gas prices if the Iran conflict ends, allowing them to profit from reduced rates. However, this year, traders have little incentive to fill storage facilities earlier due to high natural gas and LNG prices on global markets.
European wholesale gas prices remain well above pre-war levels, with the Dutch TTF benchmark recently rising by nearly a quarter. While Germany's gas supply is not yet at risk, the government's target of 71% average storage levels by November 1 appears unattainable due to rising storage rates and potential challenges like low LNG imports and infrastructure failures.
Consumer groups warn of higher gas prices this winter, urging consumers to secure fixed-price contracts for protection against rising costs.
Written by urgent.news from DW Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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