Concerns over low natural gas reserves driving up prices for households this summer
Natural gas prices are expected to rise sharply for households this summer, as concerns over the country's gas reserves are mounting. Gasunie, the Dutch natural gas transmission company, has raised alarms about the possibility that Dutch reserves may not be filled sufficiently in time for the winter, leading to potential price hikes.
Typically, after the heating season ends in March, traders replenish reserves during the summer months when natural gas prices are low, and then sell it at higher prices during the winter months when demand increases. However, experts are predicting an unprecedented situation where natural gas prices this summer will be higher than those expected for the winter months.
Gasunie has repeatedly warned that the reliable supply of natural gas in the coming winter may be in jeopardy. Traders, who are responsible for filling the gas reserves, are reportedly reluctant to purchase gas at the current high prices unless incentivized with higher premiums. "Gas is becoming expensive," experts warn.
Late last year, Gasunie issued an early caution to the market about the dwindling natural gas supplies. The reserves were already significantly lower than expected, with the Dutch reserves failing to meet European requirements, even though winter had not yet ended. Traders are now able to track gas prices from around the world, with prices for the summer months surprising many. Traditionally, traders buy gas in the summer months when demand is low, and sell it at a premium beginning in October, when demand rises. Now, natural gas prices for the summer are expected to be significantly higher than those for the upcoming winter.
In early January 2025, Gasunie reported that "gas reserves are being depleted faster than expected," though the state-owned company reportedly downplayed any immediate risk to supply. However, they also warned that in the event of a harsh winter, a situation could arise where supply falls short, leading to potentially higher natural gas prices.
Vulnerabilities might be concerning as the colder months approach, with experts now suggesting that significant action is needed to ensure reserves are at optimal levels for the next winter. Without action, the large gas purchasers in the Netherlands may prioritize selling gas in markets like Asia, where higher prices are available.
"Netherlands is rich. Our country can eventually secure enough natural gas, but the question remains: at what price? The affordability of natural gas could become an issue," said Jilles van den Beukel, an energy analyst at the HCSS knowledge center.
Martien Visser, a professor of energy transition at Hanze University of Applied Sciences, echoed the sentiment: "The Netherlands is extremely vulnerable for the upcoming winter. It’s going to be expensive."
Natural gas buyers are reportedly likely to delay purchasing gas until the last possible moment. Prices for natural gas this summer are already significantly higher than what is expected for winter 2025. “The price for natural gas this coming summer is over 48 euros per megawatt hour, while the price for the beginning of 2026 is just above 44 euros,” explained Visser, highlighting the dilemma facing gas buyers.
The Dutch government traditionally allows the free market to fill the reserves, but Van den Beukel warns that suppliers are unlikely to purchase gas at such high prices unless the government offers compensation. “The government is not in an enviable position,” he added.
Currently, Dutch natural gas reserves are only 29 percent full, which is typically sufficient, according to Van den Beukel. "But you never know. We’ve had bad experiences with events like the Russian invasion of Ukraine and an outage in the major Norwegian gas pipeline, and you saw the price spike immediately after," he said.
However, there is some hope on the horizon as new natural gas terminals are being built to increase supply. Van den Beukel noted that the United States, Qatar, and Australia will begin exporting significantly more gas to the market starting in the second half of this year. "This could lead to lower prices, but we’re not there yet," he said.
