EU not planning an emergency response to spike in energy prices caused by Iran

Officials told reporters on Wednesday that the European Union had warned its'member states' about the soaring gas prices caused by Iran, but did not see any immediate threat to supply and was not planning a response of emergency.

The U.S. and Israeli war against Iran, and Iran's attacks in the Middle East have jolted the global oil and gas market. This has led to a halt of Qatari LNG production and energy shipments across the Strait of Hormuz.

The Dutch front-month contract for gas at the TTF hub, Europe's benchmark price, eased slightly Wednesday after reaching three-year-highs on Tuesday. Prices peaked at?65.79 euro/MWh - more than twice last week's prices.

Four?officials who were present at the videocalls said that, while the European Commission expressed concern about rising oil and gas costs, it did not see any immediate risk to EU supply.

According to the Commission, at this time, EU emergency measures are not planned.

High prices may affect storage for winter

Brussels is worried that high gas prices may prevent EU countries from filling up their storages in the next few months. EU countries must fill their gas storage up to 90% of its capacity by November in order to have a winter buffer.

Gas Infrastructure Europe data showed that EU gas storage was 30% full at the moment, which is around 9% less than it was this time last.

One official said that Brussels had not observed any major storage withdrawals over the past few days.

Europe gets the majority of its liquefied gas from 'the United States. This reduces its direct exposure to disruptions in supply in 'the Middle East. Last year, the EU imported 8% its LNG from Qatar.

The impact of the Iran conflict on energy prices has been a concern for governments, especially after Europe's energy prices surged to record highs in 2022 following Russia's invasion of Ukraine and cut off gas supplies to Europe. This forced many industries to shut down, and prompted government intervention to protect consumers from the soaring costs. (Reporting and editing by Bernadettebaum, Inti Landauro, Kate Abnett)

(source: Reuters)