The European Commission has urged European Union members to start filling gas storage facilities slowly and steadily to avoid exacerbating price pressure caused by the war in the Middle East.
Amid the energy crisis caused by Russia after it invaded Ukraine in 2022, Brussels introduced a law requiring Europe’s gas storage facilities to be at least 90% full before the start of winter.
Energy Commissioner Dan Jorgensen wrote to EU capitals on Saturday, urging them to start restocking stores early and do so for a longer period “to ease pressure on prices and avoid (a) late summer rush”.
Jørgensen noted that in case of “difficult conditions” and a green light from the EU executive, countries could deviate from the EU target by up to 20 percentage points.
The Danish commissioner also called on them to “consider lowering your fill target to 80 percent as early as possible in the fill season to provide safety and security for market participants.”
Oil prices have risen more than 50 percent since the US and Israel attacked Iran three weeks ago, and natural gas prices in the EU have risen more than 30 percent.
As Europe enters its warmer months, this is the period when its countries fill up their gas tanks in preparation for winter. But the EU is in competition with Asia for limited supplies.
“Developments in Iran and the wider region threaten regional and global security,” Jørgensen said in his letter. “When it comes to energy, this situation and attacks on energy infrastructure are significantly affecting global oil and gas markets.”
He said the EU’s gas supply “remains relatively protected at this stage” as it receives most of its liquefied natural gas from the United States. “But as a net importer of energy on global markets, the resulting high and volatile global prices could also affect the EU’s gas storage projections.”
US said Saturday that it had destroyed an Iranian base that threatened shipping through the Strait of Hormuz. Tehran has effectively blocked the only entrance to the Persian Gulf, reducing global oil supplies by a quarter and seaborne gas shipments by a fifth.
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