Energy Crisis Ahead of Winter: How Resilient Is Europe?

Rising energy prices, dwindling gas reserves, insecurity in the Strait of Hormuz and Bab el-Mandeb, and the ongoing war in Ukraine have confronted Europe with a difficult test as winter approaches.

Ambassador Arjan of the International Group: The unprecedented increase in the cost of energy supply, on the eve of the cold season, has once again revealed the vulnerability of the European economy to developments outside the borders of this continent. Ursula von der Leyen, the head of the European Commission, announced a few days ago (October 14) that since the start of aggressive attacks by the United States and the Zionist regime against Iran, the price of gas in Europe has increased by 140%, the price of diesel has doubled, and the cost of importing fossil fuels from the European Union has increased by 100 billion euros. An increase that has been achieved without entering more energy into this continent.

This warning comes in the context that Europe must manage its gas reserves for the upcoming cold months and ensure the continuity of energy supply for households and industries at the same time as the economic consequences of price increases. In the meantime, the insecurity of the strategic routes of energy transmission and the continuation of the war between Russia and Ukraine have complicated the prospect of fuel supply.

Now, the question is, can Europe, despite these geopolitical pressures, provide the energy it needs in the cold season at an affordable cost and prevent a widespread crisis in the economy and the livelihood of its citizens?

expensive cold season; The cost of Europe's energy strategy

The European energy market has been facing rising prices and concerns about the stable supply of gas since the start of aggressive attacks by the United States and the Zionist regime against Iran in March 1404. According to market data on 20 Mehr (October 12), the price of the European gas index in the Dutch market reached around 83 euros per megawatt hour; While before the crisis, it was in the range of 30 to 35 euros. At the same time, the gas reserves of the European Union reached about 73.6% of capacity on 19 Mehr (October 11); A level that is still lower than the amount of reserves at the same time last year.

The European Network of Gas Transmission System Operators also warned in the gas supply outlook report for the 2026-2027 cold season that if the supply of liquefied natural gas remains limited, European reserves may reach less than 30% by the end of the cold season. Rising prices, low inventory levels and global competition for gas supply will reduce Europe's margin of safety in the coming months, leaving the continent more vulnerable to severe cold or further supply disruptions.

According to observers, the consequences of this situation go beyond the increase in the cost of electricity and heating and put pressure on the purchasing power of households and the competitiveness of industries. The increase in energy prices increases the cost of production in industries such as chemicals, plastics, and chemical fertilizers, and can lead to an increase in the price of goods, a decrease in the profit margin of companies, and the limitation of the activities of enterprises.

In a situation where European industries have already faced high energy costs and global competition, the continuation of this trend may reduce production, delay investment and encourage the transfer of some activities to regions with cheaper energy; Developments that threaten industrial employment and the economic position of Europe.

European governments are also facing limited financial resources to support households and industries; Because the expansion of subsidies and the reduction of energy taxes can increase the pressure on the public budget. The proposal to impose a tax on the excess profits of energy companies also indicates an attempt to share the cost of the crisis between governments, consumers and companies.

However, financial support will not eliminate Europe's dependence on energy imports, and the continent's success in getting through the cold season depends on stable gas supplies and cost containment. Therefore, in addition to the citizens' livelihood, the energy shock also affects the industrial competitiveness and financial capacity of European governments and reveals the costs of the continent's energy strategy.

Hormuz and Ukraine; Two fronts of the European energy crisis

Europe's energy vulnerability is not only limited to the amount of gas reserves of this continent, but also depends on the security of the transmission routes and the stability of the producing regions. About 20% of the world flow of liquefied natural gas will pass through the Strait of Hormuz in 2025, and the disruption of this passage can increase the cost of gas supply to Europe by reducing the global supply and intensifying the competition over the available cargoes.

At the same time, the insecurity in the Bab al-Mandab strait and the Red Sea can force ships to change the route through the Cape of Good Hope and increase the time and cost of energy transfer; So, according to reports published in the summer of 2026, the route of some oil tankers has increased from about 19 days to nearly 48 days. Therefore, even without a complete stop of exports, the disruption of these crossings can put new pressure on the European energy market.

These risks have become more important with the change in the European gas supply pattern after the decrease in imports from Russia. According to the 2026 report of the Agency for the Cooperation of European Energy Regulators, liquefied natural gas constitutes nearly half of the gas supply of the European Union, and about 58% of the import of this product in 2025 will be from the United States.

Although this diversification has reduced Europe's dependence on a single supplier, it has made the continent more vulnerable to global price fluctuations and competition from Asian buyers; Because limiting the supply from the Persian Gulf can intensify the competition to attract alternative cargoes and increase the cost of imports.

In addition to the insecurity of the transmission routes, the war between Russia and Ukraine also puts pressure on the European market by changing the flow of trade and damaging the energy infrastructure. In 2021, Russia would supply more than 40% of the gas consumption of the European Union, but this share has reached about 12% of the gas demand of the European Union according to this year's report of the Cooperation Agency of European Energy Regulators.

However, reducing dependence on Moscow does not mean removing the effects of war; Ukraine's attacks on Russian refineries can disrupt the supply of oil products, and Russia's attacks on Ukraine's power grid and energy infrastructure will also increase the pressure on this country on the eve of the cold season. The Associated Press report on 18 Mehr (October 10) also mentioned the continuation of these attacks and previous restrictions on Russian diesel exports.

The set of these developments shows that Europe's energy security is simultaneously affected by the insecurity of sea passages, the competition to provide alternative cargoes, and the consequences of the war between Russia and Ukraine, making the passage of the cold season more costly and unpredictable.

Can Europe survive the cold season?

The European gas supply outlook report for 2026-2027, published by the European Network of Gas Transmission System Operators on 16 Mehr (October 8), paints a dual picture of the continent's readiness; Europe's gas infrastructure is still able to meet demand, but the low level of reserves has reduced the margin of confidence.

According to this report, the European Union's underground gas tanks were only 72% full on October 1st, compared to 83% at the same time last year. On the other hand, the capacity of importing and converting liquefied natural gas into transportable gas in the European network reaches about 145 billion cubic meters during the cold season and can partially compensate for the lack of reserves. Therefore, Europe's main challenge is not the lack of import infrastructure, but the provision of sufficient cargoes and their transportation at an affordable cost.

However, this assessment is highly dependent on the continued supply of liquefied natural gas, and limited incoming shipments could make the situation more difficult. If Europe's access to this fuel remains limited, reserves may decrease to less than 30% of capacity by the end of the cold season; A situation that increases vulnerability to late cold snaps and makes it more difficult to refill reservoirs in the summer of 2027.

In the meantime, insecurity in the Straits of Hormuz and Bab al-Mandab can affect the global supply and the cost of energy transmission, and the war between Russia and Ukraine will also put pressure on the market through disruption of infrastructure and changes in the flow of fuel trade. Therefore, Europe's ability to compensate for the decline in reserves depends on actual access to shipments, competition with Asian buyers and continued geopolitical disruptions.

All in all, although based on the available evidence, widespread gas shortages in Europe do not seem certain, but a narrowing of the confidence margin of this continent is a likely scenario. Even if infrastructure prevents widespread physical shortages, rising prices can raise the cost of heating households, industrial production and government subsidies. In this cold season, Europe must simultaneously manage the consequences of the war between Russia and Ukraine, the insecurity of energy transmission routes, competition for alternative cargoes, and dependence on foreign suppliers. Therefore, the criterion for successfully passing through the cold season is not only preventing gas cuts, but also being able to provide the required energy at an affordable cost for households, industries and the public budget.