EU Calls for Demand Cuts as Gas Prices Soar Amid Global Tensions

The European energy market is facing severe pressure due to low seasonal reserves and disruptions in international LNG flows, among other factors. The European Commission has warned of a new price crisis, despite reassurances that there is no immediate threat to security of supply.

Low reserves, high prices, and geopolitical tensions have created a fragile backdrop for the market. Natural gas prices have risen significantly since the conflict with Iran in late February, and on September 21, European wholesale gas prices were up by over 140% year-on-year, intensifying concerns over new inflationary pressures.

The Commission has called on governments to consider measures that could curb demand for natural gas and electricity while efforts continue to fill storage facilities. Storage levels are at a very low level, with EU facilities standing at approximately 70.1% on September 21, roughly 15.6 percentage points lower than the previous five-year average.