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European Gas Reserves and Market Pressures
Europe is depleting its gas reserves at the fastest rate since 2018, driven by increased heating demand during a severe winter. Current reserves are at 70% capacity, a significant drop from 86% a year ago. The rapid depletion, coupled with Europe’s reliance on LNG imports to replace Russian pipeline gas, has introduced supply vulnerabilities. Supply disruptions, such as the temporary closure of Norway's Hammerfest LNG plant, further strain the market and increase price volatility. These developments raise concerns about restocking challenges for the next heating season, especially under colder-than-average conditions

Russian LNG and Pipeline Developments
The closure of Russia’s gas pipeline through Ukraine has prompted a strategic shift toward increasing LNG exports and expanding pipeline gas deliveries to China. Russian LNG exports reached record levels in 2024, despite Western sanctions complicating logistics and access to key markets. Europe continues to purchase significant volumes of Russian LNG, reflecting its energy dependency amid efforts to reduce reliance on Russian fossil fuels by 2027. However, sanctions are slowing Russia’s Arctic LNG expansion and highlighting the country’s challenges in maintaining profitability and finding new buyers in price-sensitive markets.