Britain has just two days’ worth of gas reserves available, raising concerns that the country could face an energy squeeze if global supplies are disrupted by escalating tensions in the Middle East.
New figures from National Gas show that the UK’s stored gas levels have dropped sharply over the past year. Reserves have fallen from around 18,000 gigawatt hours to just 6,700 GWh, enough to meet roughly a day and a half of national demand.
A similar volume of gas is currently held in liquefied natural gas (LNG) storage tanks. However, many European countries maintain reserves that can last several weeks.
The limited storage capacity has left Britain more exposed to global energy market pressures. Analysts say the UK is now paying higher wholesale prices for gas than other European markets because it must compete aggressively for supplies.
According to Natasha Fielding, head of gas pricing at Argus Media, the UK has experienced some of the sharpest price increases in Europe.
“The price of gas in the UK has increased by more than almost anywhere in Europe. The UK gas hub price is now above the Dutch TTF all the way from now until the end of May. Before this week, the UK was priced below the EU.”
She added that Britain’s limited storage capacity means the country has little choice but to rely heavily on imports.
“We can’t rely on withdrawing more from storage, so we have to get that gas from abroad.”
The warning comes as the global energy market faces potential disruption linked to escalating conflict in the Middle East.
Analysts at Goldman Sachs warned that oil prices could surge if the crisis continues.
“We now think that oil prices would likely exceed $100 next week if no signs of solutions emerge by then.”
“We now also think it’s likely that oil prices, especially for refined products, would exceed the 2008 and 2022 peaks, if Strait of Hormuz flows were to remain depressed throughout March.”
Economists say rising energy costs could quickly spread through the wider UK economy.
Professor Mohamed El-Erian said the country remains highly vulnerable to external energy shocks.
“Once again, we see the UK more vulnerable to external shocks than otherwise that in turn is going to translate into higher mortgage rates. So the average person will get hit from multiple sides, unfortunately.”
“The average person is going to face higher energy prices, but also higher mortgage rates and slowly but surely, noticeable increases in a broad range of goods and services because of supply chain disruptions.”
Energy analysts say the UK’s limited reserves are partly the result of reduced storage capacity over the past decade.
Ten years ago, Britain had enough gas storage to cover roughly 12 days of demand. However, several facilities were closed after government support ended and investment slowed.
According to National Gas, the country’s storage sites were operating at only 18% of their former capacity as of Friday, while LNG storage tanks were just over half full.
National Gas chief executive Jon Butterworth has warned ministers that new infrastructure may be needed to strengthen energy security.
He suggested the UK could require three new gas storage facilities or six large floating LNG terminals connected directly to the national grid.
Butterworth said policymakers must “recognise the critical role gas continues to play in maintaining a stable and reliable energy system – particularly during periods of cold weather and low renewable generation”.
He also warned that declining production in the North Sea and shifting global energy markets are increasing Britain’s reliance on imported gas.
Despite the warnings, the Department for Energy Security and Net Zero said the country’s gas supply remains stable.
A spokesperson said: “We are confident in our security of gas supply. We are working with industry to ensure the gas system is fit for the future, including maintaining security of supply.”
Analysts say an immediate shortage is unlikely. However, they warn the real pressure could come later this year when European countries begin rebuilding gas reserves ahead of winter.
