Politico: Europe’s low gas reserves raise winter supply concerns

Europe’s natural gas reserves are at historically low levels, raising concerns about potential supply shortages this winter if the Iran war continues to disrupt energy markets and colder weather boosts heating demand.

Germany, the EU’s largest gas consumer, is seen as particularly vulnerable because its storage facilities account for more than 20% of the bloc’s capacity. German reserves stood at just 47% of capacity in August, the lowest level since records began, Politico reports.

“Storage levels are not only exceptionally low for this time of year, but historically low,” said Sebastian Heinermann, managing director of Germany’s gas storage association INES.

Heinermann said Germany was still relying on a market-driven approach to replenishing reserves despite there being “hardly any market-economic incentives left.”

Across the EU, gas storage levels are around 58% of capacity, about 16 percentage points below the five-year average and the lowest level since 2011. Higher summer prices linked to the Iran war and climate-related demand have reduced incentives for traders and utilities to buy gas for winter storage.

The situation has fueled calls for Germany to intervene more directly and instruct state-controlled energy companies to secure additional supplies. Berlin has so far rejected such measures.

The European Commission has said the bloc faces no winter supply risk, but energy analytics firm Rapidan expects EU storage levels to reach only about 65% by November, saying the bloc’s winter target would require “materially higher prices.”

INES has warned that even if Germany reaches 76% storage capacity, supplies could come under pressure during an “exceptionally cold” winter, potentially affecting neighbouring countries that have agreements with Germany for emergency gas assistance.

By Sabina Mammadli