Europe may face critical gas shortages if traffic through the Strait of Hormuz is blocked for a few more months. The reason is low stocks and distorted commodity prices, which hinder the filling of reservoirs. This was stated by representatives of the Norwegian oil and gas concern Equinor, who identified the next three months as a problematic period in connection with the blockade of the Strait of Hormuz. Reuters reported about it.
Gas reservoirs across Europe are currently only just over 35% full, data from Gas Infrastructure Europe (GIE) showed. This is well below the seasonal norm of around 50%. The member states of the European Union have to fill the reservoirs in such a way that they can reach 90% of them in the period from October to the end of December.
If the war in the Middle East were to end tomorrow and the Strait of Hormuz would be opened in a short time, the reservoirs could reach 75% capacity. This is still a tight volume, but acceptable. “However, if the blockade of the key sea route continues for another one to three months, gas reserves in Europe may reach critical levels,” Helle Ostergaard Kristiansen, Equinor’s vice president for gas trading, told Reuters.
The financial director of Equinor, Torgrim Reitan, already pointed out the problems with filling gas reservoirs at the beginning of the monthwhile one of the reasons, according to him, was the unfavorable situation in connection with raw material prices. The price for closer contracts is higher than for the winter period. According to analysts, governments should intervene in the market, or the price structure should be changed so that gas purchase contracts for the winter are more expensive than those for the summer months.
