El Nino Seen Posing Limited Supply Risk to European Coal and LNG Imports
Analysts told Montel El Nino is unlikely to curtail European coal or LNG flows, but demand effects could worsen a storage deficit already at a five-year low.
A severe El Nino event this year is unlikely to significantly disrupt coal or LNG deliveries to Europe, analysts told Montel on Wednesday (2026-09-16), though the same weather pattern could lift heating demand in ways that compound an already strained supply picture. One analyst cautioned "we are not out of the woods."6
European gas storage makes that caution hard to dismiss. Stocks hit their lowest mid-August level in five years, with analysts expecting the bloc to finish the injection season well short of its 90% target, according to Daily Sabah (2026-08-18).5
The European Commission has offered reassurances. On Wednesday (2026-07-01), it told the market there was "no immediate concern" around winter supply security and that an 80% refill level, below its own 90% target, would be "sufficient," Montel reported. Ole Dramhal, senior analyst at Rystad Energy Gas and LNG Markets, expects EU storage to reach about 75% by November 1 in his base case. Ronald Pinto, principal insight analyst at Kpler LNG and Natural Gas, puts it at roughly 77%, Montel reported on Thursday (2026-07-02).3,5
At 75-77%, Europe would enter peak winter demand with materially less headroom than it has carried in recent years, and without the LNG supply cushion that sustained it before the Middle East conflict erupted.3,5
The conventional El Nino supply concern centres on reduced rainfall in Indonesian and Australian coal-producing regions, cutting mining output and lifting global prices. Warmer Pacific sea surface temperatures can also disrupt shipping routes. But analysts told Montel the effect on actual flows to Europe looks limited, shifting the analytical weight to the demand side. A milder European winter would reduce gas burn and slow the pace of stock drawdowns. The "not out of the woods" qualifier suggests that mild scenario is not guaranteed.6
The supply backdrop was already stressed before El Nino entered the discussion. The Iran war has disrupted LNG and oil exports from the Middle East, leaving Europe competing with Asian buyers for replacement cargoes. When JKM spot trades at a premium to northwest European prices, suppliers have an incentive to direct cargoes toward Asia; when that spread narrows, volumes can be drawn back west, oilprice.com reported in July (2026-07-22). JKM spot was $26.75/MMBtu on Friday (2026-09-18). The ICE Endex TTF front-month fell 2.43% to €76.27/MWh at Thursday's (2026-09-17) close.4
India offers a case study in how acute the displacement has been. Before the war, India sourced close to 60% of its LNG imports from the UAE and Qatar, oilprice.com reported, citing senior price reporter Suyash Pande. Aggressive bidding for alternatives contributed to a 251% year-on-year surge in LNG derivatives trading volumes.4
European coal has not substituted for the lost supply. Analysts told Montel in May (2026-05-21) that LNG disruptions from the Iran war are "unlikely" to reverse the EU's coal phase-out, with decommissioning timelines already embedded in utility planning. Global coal supply has its own pressures, with a deadly mining accident in China's biggest producing region and shifting Indonesian export policy tightening the market independently, mining.com reported (2026-06-16), but neither development has prompted European utilities to reverse coal closures.1,2
For European traders, the El Nino verdict on supply is relatively clear-cut. Physical coal and LNG flows are not expected to be materially curtailed. The central variable is temperature. At 75-77% storage, a cold October or November would quickly test how thin that buffer actually is. Rystad's Dramhal has 75% as his base case; if temperatures run cold rather than the mild conditions a typical El Nino implies, that margin leaves little room for any further supply surprises through the winter.5,36