The European Commission has urged EU member states to begin replenishing gas storage in advance due to risks to the energy market arising from the escalation of military actions in Iran. This step is intended to help avoid intense competition for gas supplies, which could potentially lead to a sharp spike in prices during the summer period.
This is reported by Finway
European Commission’s recommendations on targets and flexibility
EU Energy Commissioner Dan Jørgensen, in his letter to the governments of EU countries, suggested considering the possibility of lowering the mandatory target for gas storage filling to 80%. He also emphasized the need to make maximum use of the flexible mechanisms provided by EU legislation. According to his proposal, states can deviate from this target by 10 percentage points, and under unfavorable market conditions, an additional deviation of 5 percentage points is allowed. Countries must complete the filling of storage by December 1.
“The Energy Commissioner urged member states to start filling gas storage as early as possible to avoid competition for supplies that could lead to a sharp rise in prices in the summer”
Impact of the war in Iran on Europe’s energy market
Dan Jørgensen highlighted that gas supplies to the EU remain relatively stable due to limited dependence on imports from the conflict region. Additionally, some liquefied natural gas had already been delivered through the Strait of Hormuz before the escalation began. However, there is a risk that Europe, as one of the largest importers of energy resources, may face high and unstable prices in global markets, which will affect the pace of gas injection into storage.
Despite the fact that the share of gas from Middle Eastern countries in the European balance is small, competition in the global market is increasing, and European energy prices have already risen significantly.
The situation in the market intensified after the US and Israel carried out joint strikes on Iranian regime facilities on February 28, to which Iran responded by attacking American bases in Kuwait, the UAE, Qatar, Bahrain, and Jordan. On March 18, Iran reported US and Israeli strikes on the “South Pars” gas field and related facilities in Assaluyeh. US President Donald Trump threatened to “completely destroy” the world’s largest gas field, “South Pars,” if Iran continues its attacks on Qatar.