Government and industry officials anticipate an uncoordinated supply rush due to a shortage of gas reserves before winter. Market Operators can take advantage.
Growing anxiety over unusually low levels of gas storage in Europe is intensifying fears of new pressure on global energy supplies at a time when it threatens to worsen the international scramble for increasingly scarce resources.
The European Union requires member states to maintain gas reserves by 90% of capacity before winter — a rule introduced following the Russian invasion of Ukraine in 2022 to reinforce the bloc’s energy security.
However, the colder than average winter led to a more pronounced depletion of these reserves, which fell to less than 30% in March — the lowest level since 2022.
The scenario has become even more delicate with the recent rise in gas prices, after Iranian attacks practically closed the Strait of Hormuz, the strategic passage through which around 20% of the world’s liquefied natural gas circulates and which is now on the lips of the entire world.
Of this volume, 6% were destined for Europeaccording to . The disruption sent prices soaring and increased the risk associated with replenishing reserves before next winter.
Behind the scenes, government officials and industry representatives cited by the newspaper specializing in European affairs warn of the possibility of several European countries moving towards large-scale purchases simultaneouslyif storage rules are not relaxed.
This movement could further inflate demand and open up space for market operators to take advantage of high prices.
A similar dynamic has already been seen in 2022when gas prices exceeded 300 euros per megawatt-hour. It was the cuts in Russian supply, combined with new storage targets, that contributed to an abrupt increase in demand.
Replenishing reserves will also be more difficult due to competition from Asiamore exposed to the gas routes that crossed the Persian Gulf. The pressure, experts say, could push prices to high levels during the middle of this year, reducing the economic incentive for operators to sell in the winter and store gas in the spring and summer.
Although European institutions insist that it is still too early to assess the situation clearly, several governments have already considered resorting to existing exceptions that allow them to temporarily ease storage targets. At least three countries even argue that the European Commission should go further, introducing new flexibilities, including the possibility of reducing the target by up to 30%, say officials cited by Politico.
These countries also want a new European mechanism to coordinate gas purchases. According to one of the sources cited, a lower target would allow filling the reservoirs with greater margin of maneuver, without fueling excessive demand that would end up raising prices even further.
The European Commission has not yet made a decision on the best response, but the topic has already been discussed at a meeting of Energy Ministers and in recent meetings with ambassadors and national experts. In public, most governments maintain a calm speech.
In Germany, for example, reserves are at 22% of capacity, but the Minister of Economy, Katherina Reiche, sought to devalue the problem. Already in the sector, unrest is growing. The German storage association INES considers that current mechanisms are insufficient to ensure security of supply, while Eurogas warns that European rules for liquefied natural gas make the European market less attractive for exporters.
