The European Commission calls for flexibility in gas storage, reports the Financial Times.
As described by “FT”, this appeal aims to reduce demand in the face of sharp increases in energy prices caused by the conflict in the Middle East, which affected key suppliers.
In a letter obtained by the Financial Times, EU Energy Commissioner Dan Jørgensen appealed to the energy ministers of member states not to rush to replenish depleted gas reserves. “Use flexibility to reduce demand in both households and industry at a time when supply is tight,” Jørgensen wrote.
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The Commissioner proposed for Member States to lower the target for filling gas storage facilities to 80%. their capacitywhich is 10 percentage points less than the official EU guidelines. “We should do this as early as possible to provide certainty and peace of mind for market participants,” he stressed in the letter. He also recommended gradually filling reserves to avoid a “feverish end-of-summer race” that could further drive up commodity prices. Jørgensen suggested that Member States achieved their targets only by December 1, a month later than the regulations introduced after Russia's invasion of Ukraine in 2022.
Prices are rising
Concern in Brussels over rising gas prices, which have increased by 21.5% this week. following attacks on key energy infrastructure in the Middle East, prompted the European Commission to act. The commissioner's letter noted that while the EU's energy supplies “remain relatively secure,” a “collective response” to the conflict is needed. Jørgensen warned that “recent events suggest that it may take longer for Qatar's LNG production to return to pre-crisis levels.”
The situation was further exacerbated by Iran's decision to block the Strait of Hormuz, through which one fifth of the world's oil and liquefied natural gas (LNG) flows. As a result, the European TTF gas benchmark has doubled in value since the beginning of the conflict involving the United States and Israel against Iran.
“There is concern that overly rigid rules could put additional pressure on prices,” said one EU official familiar with the matter. “No need to rush.” Another official stressed: “We need to make the targets more flexible.”
Gas storage facilities are responsible for approximately 25-30 percent of the demand. Europe's winter demand for this raw material and constitute a key element in protecting the continent against supply shocks.
The EU's 90% storage targets were introduced after Russia's invasion of Ukraine, when concerns about a lack of sufficient gas supplies dominated Europe's energy policy. The European Commission relaxed these requirements for 2025, and Jørgensen recalled that Member States can use the flexibility provided for by EU regulations and, in the event of unfavorable market conditions, they can reduce the level of warehouse occupancy to 80% or even 75%.
