IEA Warns of Gas Supply Risks Amid Global Market Volatility

The International Energy Agency (IEA) has released a report highlighting the need for governments to adopt practical measures to reinforce natural gas supply security. The report, titled 'Gas Reserve Mechanisms and Flexibility Options,' emphasizes that global markets are becoming increasingly interconnected, volatile, and exposed to geopolitical shocks.

The IEA points out that two major disruptions in recent years have revealed weaknesses in the global gas system. The first was the sharp fall in Russian pipeline gas deliveries to Europe after Russia's full-scale invasion of Ukraine in 2022, which pushed gas prices to record levels and significantly reshaped global liquefied natural gas trade.

The report suggests that investment in supply resilience should be treated similarly to insurance, as upfront costs for reserve capacity and other preparedness measures can be outweighed by the economic damage from being unprepared for a major disruption. Physical gas reserves remain a core element of supply security, but storage capacity varies widely among countries, and new facilities can be expensive and take years to develop.