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Low gas storage and diesel shortages raise Europe winter energy risk

Europe’s gas storage is only just above 50% full, and the EU benchmark gas price is up 50% since mid-June, according to Wood Mackenzie.

Reported · Written up by our desk · Energy

OilPrice reports that tightening oil and gas supply is raising the risk of a difficult winter in Europe, despite the region’s energy transition plans. The outlet points to low gas inventories and a diesel crunch that could threaten fuel oil supply security for the heating season.

The article says early warning signs appeared as far back as March, when the U.S. and Israeli war against Iran disrupted Qatar’s LNG export infrastructure. Qatar was forced to declare force majeure on exports, removing what the outlet describes as a cheaper option for the EU’s LNG needs.

With the EU ending Russian pipeline imports tied to its Ukraine war-related sanctions, the outlet notes Europe is heavily dependent on LNG imports. It cites Eurostat figures that the EU sources about 21% of its energy from natural gas, and it says the continent would likely need to lean more on U.S. liquefied gas, which is described as expensive.

OilPrice adds that Wood Mackenzie reported the EU benchmark gas price has risen by 50% since mid-June, while gas storage is only just above 50% full. The outlet also says LNG imports into Europe are likely down even though storage refill season is underway.

Latest closeNat gas $2.723 ▲2.3%

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