EU Warns of Energy Price Crisis, Urges Member States to Cut Gas Demand

The European Union has issued a stark warning to member states about the risk of an impending energy price crisis driven by conflict in the Middle East. Brussels is urging governments to prepare for the upcoming winter heating season by reducing demand and continuing to fill natural gas storage facilities, Bloomberg News reported Saturday.

In a letter to national energy ministers, EU Energy Commissioner Dan Jorgensen highlighted the bloc's vulnerability due to its high dependency on imported fossil fuels. "We are facing a price crisis triggered by a supply crisis," Jorgensen wrote, according to the report, calling for urgent measures before colder weather sets in.

Market Impact and Storage Concerns

The warning comes as European natural gas prices have more than doubled since a conflict in the Middle East began in late February, according to the source report. Prices earlier this month climbed to their highest level since late 2022.

These sustained high prices have made summer gas injections less economical, leaving the bloc's reserves below typical levels. EU natural gas storage facilities are currently just over 70% full, significantly lagging the seasonal average of 86%.

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EU Calls for Action

To mitigate the impact on consumers and markets, Jorgensen advised governments to take several steps. He urged member states to continue filling storage reserves where necessary and to reduce natural gas and electricity consumption for as long as required.

The commissioner also pointed out that governments could use flexibility within EU rules to ease immediate cost pressures. According to the report, he suggested that nations could lower their storage targets to 80%, which could help alleviate the high costs associated with filling reserves at current market prices.