Written by: Islam El-Saqa
Fatih Birol, head of the International Energy Agency (IEA), warned that Europe is heading into the winter season with historically low gas inventories, noting that it is no longer able to withstand any additional shocks to energy supplies amidst regional tensions disrupting global supply chains.
On the sidelines of an international conference, Birol explained that disruptions in maritime traffic through the Strait of Hormuz affect all regions of the world, but the European continent appears to be the most vulnerable. He added that Europe will likely face a significant rise in liquefied natural gas prices in the coming months, regardless of the political situation in the Gulf region.
Natural gas storage levels in the European Union reached only 72 percent just before the onset of cold waves, a rate below normal levels, leaving a deficit equivalent to the energy needed to power millions of homes. Concerned authorities in the European bloc are studying potential options for rationing consumption among households and industrial sectors.
The IEA head attributed part of the crisis to historical over-reliance on foreign energy imports, warning that the politicization of the energy sector is casting a dark shadow over global markets. He emphasized that the overlap between geopolitics and the energy sector has reached unprecedented levels, making energy a tool for political pressure rather than a purely commercial activity.
Birol pointed out that the repercussions of the crisis have extended to include shortages of refined products such as diesel, influenced by decreased imports and declining production in some refineries. With some strategic stocks depleted to cope with market volatility, the reliance on the restoration of stable international navigation remains the only guarantee to avoid worsening the price crisis.
