Europe is bracing for a challenging winter as historically low gas reserves and ongoing disruptions in the Strait of Hormuz threaten to drive up energy costs. Fatih Birol, head of the International Energy Agency (IEA), warned that Europe’s gas reserves are significantly below average, leaving the continent vulnerable to further supply shocks. With storage levels at just 72 percent, down from the usual 90 percent, analysts estimate the shortfall could power 10 to 12 million homes.
Birol emphasized that Europe’s reliance on the Strait of Hormuz has long been a risk, particularly as the region competes with Asia for liquefied natural gas (LNG). The IEA chief noted that if winter is harsh, natural gas prices in Europe could surge. He also criticized governments for not taking earlier action to mitigate risks, stating that efforts to bypass the Strait of Hormuz should have been initiated much sooner.
The EU is also facing shortages of refined products like diesel due to Ukraine’s attacks on Russian refineries, which have halted about a third of Russian deliveries. Birol coordinated the release of 400 million barrels of crude and diesel from G7 strategic reserves earlier this year, a move that temporarily eased oil prices. However, prices have since rebounded, with gas surging 140 percent since February and Brent crude trading above $100.
Birol expressed concern over the increasing politicization of energy, warning that geopolitical tensions are dominating the sector in unprecedented ways. He hopes that the Strait of Hormuz and the Bab al-Mandeb Strait will reopen soon to prevent further price volatility. Without additional buffer zones, he cautioned, the world’s energy supply cannot withstand more shocks.