Households have already begun rushing to secure cheaper fixed-rate deals before costs climb further

Millions of British households face annual energy bills of £1,700 this winter as Europe's gas reserves fall to their lowest levels in years.

Storage facilities are barely above 50 per cent full, far below the five-year average of 90 per cent usually recorded at this point in the summer.

The widening gap has led energy consultancy Wood Mackenzie to warn that "Europe is approaching energy crisis territory."

With the winter heating season beginning on 1 November, countries now have limited time to rebuild their gas supplies.

Wholesale gas prices are already rising, with higher European costs feeding through to household energy bills in Britain.

The conflict in Iran has been the main cause of the supply squeeze after gas shipments through the Strait of Hormuz were cut off. The route normally handles around a fifth of global gas flows.

Iranian missile strikes also hit Qatar's Ras Laffan liquefied natural gas facility in March. The plant previously produced approximately 20 per cent of the world's LNG, and full repairs are expected to take years.

Pressure on supplies could increase further as the EU gradually ends its purchases of Russian gas. A complete ban on Russian LNG is due to take effect by the end of this year.

Energy consultancy Wood Mackenzie warned that the ban, combined with tighter methane regulations, "could constrain import flexibility at precisely the moment Europe needs it most."

Meanwhile, Asian buyers are fiercely competing with European nations for a shrinking pool of available LNG cargoes, intensifying upward pressure on prices globally.

Wholesale gas prices in Britain have climbed 42 per cent in recent weeks, and energy analysts at Cornwall Insight now forecast that Ofgem's price cap will increase from £1,641 to £1,700 per year from October.

Households have already begun rushing to secure cheaper fixed-rate deals before costs climb further.

According to comparison site Uswitch, the cheapest available tariff rose by £111 in just a fortnight, with fixed deals jumping eight per cent over the same period.

Tom Marzec-Manser, a director at Wood Mackenzie, acknowledged that Britain is better positioned than many European neighbours owing to its own production and reliable Norwegian pipeline supplies.

"Britain produces more gas than most EU countries and it is very well supplied with both Norwegian piped gas and LNG," he said.

Yet he stressed that British consumers would not escape the fallout: "Wholesale gas prices are a key component of retail gas prices, so ultimately any increase in the European wholesale price will feed through to consumers."

The warnings from industry leaders have been stark. Chris O'Shea, the head of British Gas owner Centrica, said last week: "European gas storage levels are low. UK gas storage levels are incredibly low. If it's not a warm winter, then there'll be problems."

Goldman Sachs has also sounded the alarm, with analyst Samantha Dart cautioning that Europe has "only small room for error" as it races to fill reserves before the cold arrives. She projected that storage could fall to just 28 per cent by the end of March, leaving a razor-thin buffer against a severe winter.

"Such end-winter storage level would be enough to withstand a two-standard-deviation colder-than-average winter, but not by much," Ms Dart said.

Wood Mackenzie's Massimo Di Odoardo warned that intense competition from Asian importers would keep costs elevated well beyond this season: "Low European inventories, strong Asian demand and limited new LNG supply growth almost guarantee elevated prices through this winter and into 2027."