European Union calls on member states to stockpile winter gas supplies

EU Urges Member States to Meet Early Gas Storage Targets Amid Global Market Volatility

The European Union has issued a letter to its member states, urging them to begin meeting their gas storage targets early in order to mitigate pressure on prices and avoid an end-of-summer rush. The call comes as global energy markets continue to experience volatility due to ongoing conflicts in the Middle East.

Iran’s recent attack on Qatar’s Ras Laffan Industrial City complex has disrupted global supplies of liquefied natural gas (LNG), with the facility providing approximately 20% of global LNG supplies. The attack, which was retaliation for an Israeli strike on Iran’s South Pars gasfield, has knocked out 17% of Doha’s export capacity and is expected to affect exports for up to five years.

The EU’s Energy Commissioner, Dan Jorgensen, has advised member states to consider reducing their filling target by 10 percentage points to 80%. This move aims to alleviate pressure on prices, which have risen by over 30% since the start of the war in February. The commissioner noted that while the EU’s gas supply remains relatively protected, the resulting high and volatile global prices may impact EU gas storage projections.

Member states are required to maintain gas reserves at 90% of capacity to meet winter heating and power demand. By meeting early targets, countries can help ensure regional and global security. In case of “difficult conditions,” member states may deviate from their target by up to 20%. The commissioner also noted that oil prices have surged by over 50% since the start of the war.

The EU’s letter emphasizes the importance of cooperation among member states in addressing the challenges posed by global energy market volatility.

Source: Al Jazeera