The European Commission urged EU member states on Saturday to take urgent steps to lower the filling level of natural gas designated for the upcoming winter by 10%. This move aims to alleviate the growing pressures on energy markets and prices resulting from the impact of the U.S.-Israeli war on Iran, which has adversely affected supplies.
In a press conference, European Commissioner for Energy, Dan Jørgensen, called on member states to "consider reducing the storage filling target to 80% as soon as possible from the storage season." This figure represents a 10% decrease from the traditional target of 90%, reflecting the increasing risks associated with gas markets.
The economic repercussions of the war on Iran are still tangible; oil prices have surged by over 50%, and alongside this, natural gas prices within the European Union have risen by more than 30%. Therefore, European officials are concerned that these ongoing price hikes could accelerate inflation, consequently affecting economic growth in the member countries.
As winter comes to an end, European countries are preparing to fill their gas inventories to cope with the approaching cold seasons. However, significant fluctuations in gas prices and rising supply costs may attract competitors from Asian countries, complicating the storage process in Europe.
In his remarks, Jørgensen confirmed that gas supplies to the EU "remain relatively protected at this stage," clarifying that most liquefied natural gas (LNG) comes from the United States. Despite this assurance, he warned that high and volatile global prices could impact future gas storage forecasts in the Union.
The impact of the war on Iran on energy markets could also destabilize gas and oil markets in neighboring countries, necessitating additional measures from the European Union to ensure energy security. This issue remains crucial given the increasing geopolitical conflicts in the region, which intersect with Europe and the world's energy interests.
Historically, global energy markets have faced similar pressures due to political conflicts and military confrontations in the Middle East. In the current pressures, the circumstances demand quick and effective strategies to ensure supply continuity and protect the European economy from potential negative impacts. Thus, reducing the gas storage filling level is a precautionary step aimed at enhancing the Union's resilience in the face of increasing pressures.