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EU warns of price crisis and urges gas consumption cuts
Economy
The European Union has warned member states of a potential energy price crisis linked to the conflict in the Middle East.
EU urging governments to prepare for winter by cutting consumption and continuing to fill gas storage facilities, Bloomberg reports.
EU Energy Commissioner Dan Jørgensen wrote a letter to EU energy ministers—seen by Bloomberg—noting that the bloc's reliance on imported fossil fuels has left it vulnerable to energy market shocks, and called for urgent preparations ahead of the heating season.
"We are facing a price crisis linked to a supply crisis," Jørgensen wrote, according to Bloomberg.
European gas prices have more than doubled since the start of the US-led war against Iran in late February, reaching their highest level since late 2022 earlier this month.
EU gas storage facilities were just over 70% full—below the seasonal norm of 86%—as high short-term prices made summer injections less economically attractive, the report states.
According to reports, Jørgensen said governments could utilize flexibility within EU gas storage rules to lower the filling target to 80%, thereby easing price pressure and reducing restocking costs.
He also urged countries to maintain gas injections where necessary and to cut gas and electricity consumption as much as required, Bloomberg reports.