Europe’s risk outlook: September 2026–March 2027

Risks and warning indicators for Europe, September 2026–March 2027

For the general account of how disruption travels between food, water, energy, materials, infrastructure, and social systems, see Europe’s exposure to cascading risks.

Outlook in brief

The main risk over the next six months is that climate, food, energy, and materials pressures reinforce one another. Severe heat and drought have depleted soils and rivers; Mediterranean waters remain exceptionally warm; summer crops and pastures have been damaged; gas storage is below normal; and mineral supply chains remain concentrated and subject to export controls. Europe enters this period with less spare capacity to meet essential needs and absorb further shocks. Disruption in one system is therefore more likely to spread into others.

The outlook first assesses the state of Europe’s essential systems and their capacity to absorb further shocks. It then follows with a scenario analysis of how pressures could develop in the next six months. The final chapter sets out what to monitor across each system: external pressures, buffers and response capacity, and dependencies and spillovers, to see whether conditions are easing or deteriorating.

1. The state of Europe’s essential systems: reduced capacity to absorb further shocks

Europe starts the period with several buffers at risk: water reserves and river flows, feed supplies and farm margins, gas storage and hydropower reserves, and access to critical materials. All are crucial for more than one essential system.

Heat and wildfire: Western Europe had its warmest summer on record, at 2.54°C above the 1991–2020 average. By 16 September, 669,118 hectares had burnt in the EU, almost twice the 20-year average.

Water: Drought affected around half of the EU and UK. The Rhine reached a record 2.5 month and counting low level, with 4 measuring stations recording 30+ days of “extremely rare low flow”, and the river being effectively split in two, stopping all cargo. The Danube and other European rivers are in similarly challenging conditions, with their ability to support drinking water, freight, irrigation, hydropower, and industrial cooling at risk.

Food: Winter cereals were near average, but some summer-crop yields were as much as 14% below the five-year average and grassland productivity had fallen sharply. Nitrogen fertiliser prices were 71% above the 2024 average. The starting strain is concentrated in feed supplies and farm margins rather than staple-food availability.

Energy: European gas prices rose from around €45/MWh in June to €80/MWh in September. EU gas storage was 68.5% full, against an 84% five-year average. In south-west Norway, hydropower reservoirs were 36 percentage points below their seasonal median, compared with 18 points below nationally; the region supplies electricity to Germany, the Netherlands, and the UK. Qatar’s Ras Laffan LNG complex remained offline, while the Strait of Hormuz carried around 25% of global seaborne oil trade and almost 20% of global LNG exports in 2025. Gas storage, hydropower reserves, and imported fuel routes were all under strain, although the European Commission saw no immediate security-of-supply risk.

Materials: European prices for gallium, dysprosium, and terbium were around five times Chinese domestic prices. Chinese licensing already covered seven medium and heavy rare earths, and 14 EU entities had been added to China’s export-control list. Gallium supports advanced semiconductors and telecommunications; dysprosium and terbium enable heat-resistant magnets used in electric vehicles, wind turbines, industry, and defence. Small delays in these inputs can hold up production of much higher-value equipment because supply is concentrated and substitutes are limited.

2. How pressures could develop through March 2027: a scenario exploration

To assess what these depleted buffers could mean over the next six months, the following scenario exploration follows the main pressures across three periods: the autumn transition, peak winter stress, and late-winter depletion and carry-over. It focuses on developments that could further weaken a system’s buffers or spread disruption to other systems.

Across the exploration, five developments would place the greatest strain on Europe’s already weakened systems:

Flood damage without water recovery. Intense autumn rainfall causes flooding and erosion but fails to replenish groundwater and reservoirs.
Agricultural strain carrying into 2027. Feed shortages and weak farm finances are compounded by poor winter-crop establishment.
A winter energy squeeze. Cold, low-wind weather coincides with low gas storage, weak hydropower reserves, and disrupted Gulf LNG supply.
Delays to critical materials. Chinese export controls hold up inputs needed for essential infrastructure and industry.
A wider affordability shock. High energy and food costs weaken households, industrial production, and governments’ capacity to respond.

September–November: the autumn transition

Europe enters autumn with depleted soils and rivers, extensive burn scars, and a western Mediterranean that was around 6°C above average in August. The main climate risk is a rapid shift from drought to intense rainfall. A persistent storm over dry or burnt catchments could cause flash floods, erosion, and polluted runoff without restoring deeper groundwater. Similar warm-sea conditions helped intensify the 2024 Valencia floods. The main severe risk is a localised flood somewhere in the western Mediterranean; forecasts cannot identify where or when.

Summer crop and pasture losses have already reduced feed and weakened farm finances. Autumn soil moisture and rainfall will determine whether winter crops establish well. The near-term risk is continued pressure on feed, livestock, and farm margins rather than a shortage of staple food.

Energy and materials constraints could further reduce winter buffers. Gas prices have recently traded around €74–80 per megawatt hour, storage is below normal, and Qatari LNG supply remains disrupted. Prices could exceed €100 per megawatt hour at the winter peak if Persian Gulf LNG exports remain very low. A threatened 90-day US diesel export ban is another autumn risk: the US supplied 420,000 barrels to EU members and the UK in August, more than half of their diesel imports that month. With Gulf supplies already reduced, a ban would tighten fuel for heavy transport and industry and drive up prices. Wider Chinese controls could return on 10 November, including a rule covering products with as little as 0.1% Chinese rare-earth content. Weak gas refilling and delayed material deliveries would leave less spare capacity before winter. High prices and delivery delays are more likely than a widespread physical shortage.

December–January: peak winter stress

Seasonal forecasts suggest a mild average winter, which would lower expected heating demand. Reliability may still depend on a handful of difficult days. A cold spell combined with low wind, an infrastructure outage, weak hydropower, or tight LNG supply could accelerate storage withdrawals and raise electricity and gas prices. The most plausible severe outcome is a short compound shock to reliability and affordability. A prolonged Europe-wide shortage is less likely.

The 2021–2023 energy crisis shows how an energy-price shock can spread into industrial production, household affordability, and public finances, although its weather conditions differed from those expected in 2026–2027. European governments allocated or earmarked €758 billion between September 2021 and January 2023 to shield households and firms; the full amount was not necessarily spent. If prices rise sharply, energy-intensive firms may reduce output, vulnerable households may cut essential consumption, and governments may face renewed pressure for support. Targeted measures can contain immediate harm, while prolonged broad support reduces fiscal room and can delay investment in efficiency, grids, and flexibility.

February–March: depletion and carry-over

By late winter, resilience will depend on the buffers left after winter and the availability of alternative supplies. Low gas and material inventories, depleted water reserves, weak farm finances, and constrained emergency budgets would leave less room to absorb a late cold spell, flood, or supply interruption. Dependence on a small number of suppliers or routes would make those shocks harder to contain.

The most plausible concern is cumulative depletion rather than one Europe-wide crisis. Winter-crop condition, groundwater and reservoir recovery, inventories, repair backlogs, and delayed infrastructure projects will show whether the pressures of 2026 are carrying into the next season.

3. What to monitor

Monitoring resilience means looking beyond headline figures to see where pressures are accumulating and spreading. For each provisioning system, the indicators are grouped under three headings: external pressures; buffers and response capacity, including developments that strengthen resilience; and dependencies and spillovers through which disruption may spread to other systems.

Heat and wildfire

External pressures. Track renewed fire activity, periods of unusual warmth, and the location and intensity of heavy rain over burnt or severely dried land.
Buffers and response capacity. Monitor whether emergency services have recovered from the summer and whether work to stabilise slopes, retain water, and limit erosion is reducing exposure before heavy rain arrives.
Dependencies and spillovers. Watch for flash floods, polluted runoff, erosion, or damage to water systems, transport, energy infrastructure, and settlements.

Water

External pressures. Track the amount, timing, and location of rainfall, and whether it soaks into the ground or runs off dry, sealed, or burnt land.
Buffers and response capacity. Monitor soil moisture, groundwater, reservoir levels, and river flows in each river basin. Also track progress in retaining water in soils and landscapes, restoring natural storage, reducing leakage, and protecting water-treatment systems.
Dependencies and spillovers. Pay particular attention to basins that supply drinking water, farming, freight, hydropower, or industrial cooling. Flooding, erosion, sewer overflows, or water-treatment disruption while reserves remain low would show that rain is adding damage without restoring water security.

Food

External pressures. Track further crop, pasture, and fodder losses, as well as weather and input-cost pressures affecting the next growing season.
Buffers and response capacity. Monitor winter-crop planting, germination, and early condition; feed and fodder stocks and how quickly they are being used; and farm arrears and access to credit. Improving crop conditions, recovering feed stocks, and easier access to finance would strengthen the system’s ability to absorb further shocks.
Dependencies and spillovers. Watch for feed shortages leading to livestock liquidation, or high energy and fertiliser costs weakening farm production. Poor crop establishment combined with financial strain would show that a temporary shock is becoming a longer-term capacity problem.

Energy

External pressures. Track cold weather, periods of low wind, weak hydropower, changes in LNG supply, and major infrastructure outages.
Buffers and response capacity. Monitor gas-storage levels and withdrawal rates, hydropower reserves, LNG arrivals, and regional electricity bottlenecks. Repairs, lower demand through efficiency, and additional supply or grid capacity would improve the system’s ability to cope.
Dependencies and spillovers. Watch for energy constraints leading to industrial curtailment, emergency measures to reduce demand, or rapidly expanding household support. Regional price differences may reveal places where available energy cannot reach demand.

Materials

External pressures. Track export controls, licensing decisions, cancelled orders, longer delivery times, and actual delivery failures.
Buffers and response capacity. Monitor how many days of usable inventory remain and whether stocks are in the right place, under accessible ownership, and suitable for their intended use. New suppliers, larger accessible stocks, recycling, and effective substitutes would reduce exposure.
Dependencies and spillovers. Watch for shortages delaying grids, water systems, communications, medical equipment, or defence projects. Project postponements or the use of lower-performing substitutes would show that material constraints are weakening other systems.

Social, fiscal, and institutional capacity

External pressures. Track food, energy, and housing costs together, along with sudden losses of income or employment in exposed sectors.
Buffers and response capacity. Monitor household arrears, changes in essential consumption, requests for emergency support, and the remaining room in public budgets. Targeted support, lower essential costs, and stronger access to basic services would improve resilience.
Dependencies and spillovers. Watch for high living costs reducing essential consumption, industrial disruption increasing unemployment, or repeated support measures narrowing governments’ ability to respond to the next shock.