Theodosis Pipis – Correspondence from Brussels
Europe is heading into the coldest months with gas reserves at their lowest levels in 13 years, raising concerns among energy traders about a potentially difficult winter.
Gas storage facilities in the EU were around 63% full in the last week of August. This figure is significantly lower than the average of about 80% recorded during this period in recent years, which makes the current level one of the lowest for the time, according to The Guardian. If gas storage continues at the current slow pace, the EU may start the winter heating season with reserves around 20% below the average of the last five years.
How will Cyprus be affected?
In the case of Cyprus, the vulnerability is perhaps more structural: the island has one of the highest dependencies on energy imports in the EU, as 87.7% of gross available energy came from imports in 2024, according to the European Commission. Oil and petroleum products alone accounted for 85.2% of Cyprus' gross energy consumption that year. This means that while Cyprus does not face the same shortfall of reserves observed in the European gas market, it remains highly exposed to international fuel prices and geopolitical turbulence. The current crisis has already demonstrated how quickly a conflict can affect global fossil fuel markets, with the US-Iran war causing fossil fuel prices to rise. For Cyprus, where the power generation system is still heavily dependent on imported fuels, another prolonged period of high energy prices could translate into increased costs for households and businesses.
The European gas crisis also raises questions about Cyprus' long-overdue plan to include natural gas in its energy mix. The island has been working for years to create a liquefied natural gas (LNG) terminal in Vasiliko, which would allow the use of imported liquefied natural gas to generate electricity, but the project has faced significant delays. The European Commission says the delays are hampering Cyprus' efforts to diversify its energy supply, while the lack of electricity interconnections with neighbouring countries leaves the country particularly isolated from wider European energy markets.
At the same time, Cyprus is developing its offshore natural gas reserves, which offers the island the opportunity to play a role in supplying Europe itself. In August, Energy Minister Michalis Damianos said, in an interview with the Associated Press, that natural gas from the "Kronos" field could start reaching European markets as early as 2028, with the project expected to be the first development of a Cypriot natural gas field to supply European markets. This creates a special niche for Cyprus: the country is simultaneously trying to secure gas for its own energy system, while also seeking to make its offshore resources a potential source of energy for a Europe increasingly concerned about security of supply.
Perhaps the most important lesson from Europe's gas problems is that energy security cannot depend solely on finding another source of imported fossil fuels. Cyprus has enormous potential to reduce its exposure through renewable energy sources, particularly solar energy, yet it still has a significant way to go. Renewable energy sources accounted for 27.5% of electricity consumption in Cyprus in 2025, one of the lowest rates in the EU, despite the country having some of the strongest solar capacities in Europe.
Table - Image: https://ec.europa.eu/eurostat/databrowser/view/nrg_ind_ren__custom_19370136/default/table
Therefore, the European Commission has identified the development of renewable energy sources, the expansion of the electricity grid and energy storage as critical factors in strengthening Cyprus' resilience against external energy shocks. The contrast with the current European gas crisis is significant: when gas supplies become uncertain or expensive, countries with diversified power generation systems have more options. For Cyprus, investments in solar generation, battery energy storage and stronger electrical interconnections could reduce the island's exposure to the kind of international price volatility that is currently putting pressure on European energy markets.
EU countries
EU countries are struggling to replenish their gas reserves to get closer to the revised 80% target by the start of winter. This effort has been made more difficult by significant disruptions in oil and gas exports from the Gulf region following the US-Israel war with Iran. A colder-than-expected end to last winter, combined with increased reliance on gas-fired power plants during the European summer's heatwaves, has further reduced the bloc's gas reserves. Under normal circumstances, storage facility operators replenish stocks throughout the summer, when demand and prices are generally lower.
Although no natural gas shortage is expected across Europe today, market participants expect prices to rise significantly. The European benchmark price for natural gas has recently reached a three-year high, exceeding €68 per megawatt hour (MWh), which is more than double the level since the beginning of the year.
Concerns about gas supplies are particularly acute in western Europe, where storage levels are significantly lower than in countries such as Italy and Poland, which have managed to replenish their reserves at more than 80% of their capacity.
Germany, which has the largest gas storage capacity in Europe, currently has facilities that are about 50% full, according to Gas Infrastructure Europe. Storage facilities in Belgium and the Netherlands are also at relatively low levels, at around 51% and 45% respectively. Both countries are directly connected to the UK's gas market through pipeline networks.
The UK is expected to become increasingly dependent on gas imports as production from the North Sea continues to decline. This dependence could increase further, as Norway's gas production is also projected to decline from 2030 onwards.
As Europe enters winter with significantly lower gas reserves than in previous years, the coming months are likely to put significant pressure on the continent's energy system again. While widespread natural shortages are not expected today, limited inventories, rising prices and uncertainty about global gas supplies leave European markets vulnerable to sudden increases in demand or further import disruptions. If supply remains tight while demand increases during the colder months, European consumers may face another period of intense price volatility and increased energy costs.
(With information from the Associated Press and The Guardian)
