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Despite successfully filling its gas storage ahead of winter this year, Europe’s energy crisis is far from over. The situation for Europe could, in fact, be worse next winter when Russian pipeline gas supply will be down to a trickle, at best.

European households and businesses have already seen a rise in total energy costs by $1.06 trillion (1 trillion euros), according to estimates by European economic think-tank Bruegel published by the International Monetary Fund (IMF). According to Bruegel’s analysts, if governments in Europe do nothing except offer financial support, and if they cover the price increases, this sum would represent a massive 6% of the annual GDP of the EU.

“Massive government support could delay adjustment to a new price equilibrium and create the need for even more support,” Bruegel’s experts say.

Instead, the EU needs a “grand bargain” to encourage savings and increase supply at the same time.

The next 12 to 24 months will determine whether Europe will be able to cope with the energy crisis without having to resort to mandatory rationing or without losing too much industry competitiveness.

Europe’s energy systems were already put to the first real test this month amid an Arctic blast that swept through most of northwestern Europe, bringing freezing temperatures, snow in the UK, and depressing wind speeds in Germany.

Natural gas storage sites in the EU started to drain, with storage at 84% as of December 17, according to Gas Infrastructure Europe. Inventories are higher than at this time last year, but the true test for Europe will come next year when it will have to refill gas storage sites adequately enough to meet the 2023/2024 winter demand.

This is where the planning becomes trickier, depending on how low inventories will be after this winter and whether the EU has the capacity to haul in continued record volumes of LNG and continue outbidding Asia, especially if demand in China rebounds after a reopening from strict Covid curbs.

With lower gas consumption and not much Russian gas flowing via pipelines, the EU has continued to cut its dependence on Russia, from around 40% of imported gas supplies before the Russian invasion of Ukraine, to less than 9%, according to EU figures from September.

However, the significant drop in Russian gas supply this year occurred only in June.

Ahead of winter 2023/2024, the gap in gas supply in Europe will be much wider without Russian gas. Europe will not be importing much Russian gas—or none at all if Russia cuts off deliveries via the one link left operational via Ukraine and via TurkStream—compared to relatively stable imports from Russia in the first half of this year before Moscow started gradually cutting volumes via Nord Stream in June and then shut down the pipeline in early September.

According to a recent report from the IEA, if Russian gas supply drops to zero and Chinese LNG demand rebounds to 2021 levels, the EU could have a gas supply-demand gap of 27 billion cubic meters in 2023.

With the plunge in Russian pipeline gas deliveries, Europe will need “huge volumes” of LNG next year, commodity trader Trafigura said earlier this month.

“Looking forward, we expect gas and LNG markets to remain volatile,” Trafigura said in its annual report for the year to September 30.

“While Europe should avoid a blackout this winter by drawing on inventories and cutting demand, it will need to import huge volumes of LNG in 2023 given the massive reduction in flows from Russia,” Trafigura said.

Natural gas prices in Europe will have to remain elevated so that the continent can continue to attract most of the LNG cargoes in competition with the other key demand centers, according to Trafigura. The commodity trader expects Europe to prioritize the security of supply “through next winter and beyond.”

Huge uncertainties with weather and the EU’s ability to compete with a potential increase in LNG demand in Asia will determine how Europe will fare next winter.

“Behind us now are two months of ‘buyer’s market’ with peak inventories, warm weather, a long queue of LNG ships, and depressed TTF prices,” commodity analysts Ole Hvalbye and Bjarne Schieldrop of SEB Bank said in early December.

“Ahead of us is the huge Q1 uncertainty and at least 12 months of ‘seller’s market’ as the race is on to fill EU nat gas inventories to a satisfying level by October 2023.”

The Tesla CEO says a share buyback would depend on the severity of any recession

Elon Musk pledged to pause selling shares in Tesla Inc. TSLA -8.88% and said that a decision on a buyback of the company’s stock could be influenced by the severity of any economic downturn as he tried to ease concerns his purchase of Twitter was to the detriment of the electric-vehicle maker.

Mr. Musk, on a Twitter Spaces call Thursday, signaled he would not sell any Tesla stock for a minimum of 18 months to 24 months. The chief executive has liquidated more than $39 billion in the company’s shares since the stock peaked in November 2021.

“You certainly have my commitment I won’t sell stock until, I don’t know, probably two years from now. Definitely not next year under any circumstances and probably not the year thereafter,” he said. Mr. Musk has pledged not to sell Tesla shares before only to resume doing so.

The billionaire’s comments on the Twitter Spaces forum were some of his most expansive to address worries among Tesla investors that he has been distracted since he bought Twitter Inc. in October in a deal valued at $44 billion. Tesla’s stock has plunged 60% this year, performing worse than the wider market.

Some of Mr. Musk’s handling of Twitter and his political comments on the platform have spurred concern Tesla’s brand could suffer. The company’s image has taken a dent in recent months, in part because of Mr. Musk’s Twitter involvement, according to brand surveys.

Mr. Musk said that he wouldn’t muzzle himself on Twitter. “I’m not gonna suppress my views just to boost the stock price,” he said on the Twitter Spaces call.

Mr. Musk said he couldn’t think of a Tesla issue he didn’t deal with in recent weeks because he was busy at Twitter. “I had to have a sort of short-term, month-or-so if just getting the insane Twitter costs under control or Twitter would have just gone bankrupt,” he said. He added “that is basically almost entirely done” with some more engineering work left to be accomplished. Mr. Musk this week suggested once again he may step down as Twitter CEO if he could find a suitable replacement.

The Tesla boss also tried to strike an upbeat note about the car company’s long-term prospects even as concerns have been growing that demand for its vehicles is softening. Tesla is offering rare discounts for buyers to take delivery of vehicles before year-end.

“There is stormy weather ahead, but then there is going to be sunshine thereafter,” Mr. Musk said. He said near-term department pressures were driven by rising interest rates.

The economic turbulence could impact some of Tesla’s plans, he suggested. “Are we talking about a mild recession, a moderate recession, a severe recession? We don’t know yet,” Mr. Musk said.

In October, Mr. Musk said Tesla could pursue a share buyback of $5 billion to $10 billion and said a meaningful buyback was likely. The company has discussed such a share repurchase at the board level, he said, but hasn’t signed off on it.

“The board is very open to doing a buyback,” Mr. Musk said in a live conversation broadcast on Twitter, though he added, “It wouldn’t be smart to do a buyback and then discover the recession is worse than 2009.”

The Tesla boss also said the car company would continue to invest as part of its growth plans. “We are applying capital at pretty close to the fastest rate we can spend capital and not be wasteful,” he said.

The company, he said, is “close to picking a location for another Gigafactory,” without providing details. Mr. Musk has said Tesla might open 10 to 12 new factories to help boost Tesla output to 20 million vehicles at the end of the decade.

He said Tesla also planned to start refining battery-grade lithium at a facility in Corpus Christi, Texas, in about two years to help the electric-vehicle maker satisfy its need for material needed for power cells.

Amid investor concerns about Tesla—the company’s stock fell 8.88% on Thursday—Mr. Musk said, “The actual execution of the company is outstanding.” Tesla shares advanced more than 2% in aftermarket trading after Mr. Musk said he would pause selling shares.

Write to Robert Wall at robert.wall@wsj.com

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