BRUSSELS: The European Commission on Saturday urged EU member countries to lower their target for filling natural gas storage in the coming months, to alleviate price pressures caused by the US-Israeli war on Iran.
EU energy commissioner Dan Jorgensen sent a letter asking to "consider reducing your filling target to 80 percent as early as possible in the filling season to provide certainty and reassurance to market participants", down from the usual 90% goal.
Iran's retaliation for the US-Israeli war launched against has included attacks on its oil- and gas-producing Gulf neighbors, effectively closing the strategic Strait of Hormuz to tankers.
Price shock
Oil prices have soared more than 50% since the start of the war, which was triggered on Feb. 28, and natural gas prices in the EU have risen by more than 30%.
The price shock is expected to lead to a higher pace of inflation, and dampen economic growth.
While Europe is entering its warmer months, this is the period its countries refill their gas storage in preparation for winter.
With higher gas prices, though, and elevated risk for supply, the EU is facing competition with Asia for supply.
"Developments in Iran and the wider region threaten regional and global security," Jorgensen said in his letter.
'Refill stores early'
"When it comes to energy, this situation and the attacks on energy infrastructure are significantly impacting global oil and gas markets."
He said that the EU's gas supply "remains relatively protected at this stage", as it gets most of its liquified natural gas from the United States.
"But, as a net energy importer on global markets, the resulting high and volatile global prices may also impact the EU gas storage projections."
Consequently, Jorgensen said, EU countries should look to refill stores early, and do so over a longer period, "to mitigate pressure on prices and avoid (an) end-of-summer rush".
He noted that, in case of "difficult conditions" and a commission assessment, the countries can deviate from the target by up to 20%.
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