The European liquefied natural gas (LNG) market is facing the risk of shortages in the third quarter of this year due to low gas reserves on the continent. Filling gas storage facilities has become more difficult following the effective closure of the Strait of Hormuz amid military conflict with Iran, as well as damage to LNG infrastructure in Qatar, including Shell’s Pearl GTL plant. These events have led to a roughly 50% increase in gas prices in Europe over the past few days.

Gas Storage Situation

Gas storage levels in Europe are significantly below expectations. Currently, storage facilities are about 56% full, which is well below the usual levels for this time of year. According to European Union requirements, gas storage must reach 90% capacity by November 1 to ensure stable supplies during the winter season.

Supply Redirection and Consequences

LNG shipments that previously went to Asia are now being redirected to the European market, which could result in shortages in the next quarter. At the same time, repairs on the damaged Pearl GTL Line 1 are ongoing, with operations expected to resume by the end of the first quarter next year.

Financial Performance and Outlook

Shell’s integrated gas division reported adjusted earnings of $2.69 billion for the second quarter, up from $1.74 billion in the same period last year.

Despite short-term volatility in the LNG market, the company remains confident in the segment’s long-term prospects. Global LNG demand is projected to grow by about 65% by 2050, with gas seen as a reliable and safe stabilizing element in the energy system.