The European Commission is urging EU governments to begin refilling gas storage caverns immediately in preparation for next winter, citing disruptions to global fuel markets caused by the conflict involving Iran. While there is currently no immediate threat to EU gas supply, the Commission is encouraging proactive measures to counter soaring prices.
EU Encourages Early Gas Storage Refill
The call to action came during a closed-door meeting of EU diplomats on Thursday. Officials emphasized the need to build stocks ahead of winter, recommending countries begin filling storage in April.
Impact of Iran Conflict on European Gas Prices
European gas prices have increased by more than 70% since February 28, when the conflict began. The situation has been exacerbated by the closure of the Strait of Hormuz, a critical waterway for global energy flows, which carries 20% of the world’s oil and liquefied natural gas. Additionally, Iranian attacks have impacted Qatar’s LNG export capacity, knocking out 17% of its operations.
EU Storage Targets and Current Levels
The Commission reminded governments they have the flexibility to lower their storage target to 80% of capacity, rather than adhering to the formal 90% requirement. However, current EU gas storage levels are unusually low for this time of year, standing at just 28% full, according to data from Gas Infrastructure Europe.
Brussels aims to avoid a later rush to secure gas, which could lead to further price spikes. However, high prices are currently discouraging companies from purchasing gas for storage, and some countries, like the Netherlands, have extremely low stock levels, at only 6% of capacity.
EU Gas Supply Security
A Commission spokesperson stated that the EU gas supply is currently secure, relying primarily on Norway and the U.S., rather than Middle Eastern producers directly affected by the attacks.
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