The head of the European Union's energy department has urged member states to start filling gas storage facilities early to avoid competition for supplies that could cause prices to jump in the summer, as the bloc seeks to mitigate the consequences of the war in Iran. This was reported by Bloomberg, writes UNN.
Details
Governments should also lower gas storage filling targets to 80% and make maximum use of the flexible options provided by EU legislation, wrote Energy Commissioner Dan Jørgensen in a letter seen by Bloomberg News. Countries can deviate from this figure by 10 percentage points, and in unfavorable market conditions, by another 5 percentage points. Countries must fulfill their gas storage obligations by December 1.
As of now, supply security remains relatively protected due to limited reliance on imports from this region and LNG supplies that passed through the Strait of Hormuz before the conflict. "But, as a net energy importer in global markets, the EU may feel the impact of high and volatile global prices on filling its gas storage facilities.
The letter, previously reported by the Financial Times, came after Iran's latest attacks on Qatar's LNG production, which could take up to five years to repair. Although the EU receives a relatively small share of its gas from the Middle East, the bloc faces increased competition in the global market, and prices in Europe have risen.
Recall
Gas reserves in Europe fell below 30 percent due to a cold winter. EU countries are asking to lower storage norms to prevent price speculation by traders.