EU Warns of 'Very High' Winter Energy Prices
- Europe warned member states today of an energy crisis, urging governments to consider curbing demand as continental LNG reserves sit about 20 percentage points below normal levels ahead of winter.
- Middle East disruptions have forced Saudi Arabia to pause crude and fuel shipments to Europe, with three key facilities—Yanbu, Samref, and Yasref—operating below capacity on the Red Sea, now a 'tinderbox' following militia attacks.
- Fuel prices have jumped to above $6 per gallon in the United States and over €2 per liter in Europe, signaling a "major" potential supply problem if supply chains are not restored by Christmas.
- Unlike 2022 and 2023, when Russia's invasion spiked prices rapidly, Europe is "facing a slow-motion crisis," says Ana Maria Jaller-Makarewicz, an analyst at IEEFA, as structural market tightness persists.
- Thierry Bros, a professor at Sciences Po Paris, says Europe's only exit is to "diversify and to destroy demand," while political uncertainty ahead of November elections could further constrain fuel availability.
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"There is no doubt that we are heading towards a difficult winter," said the Danish official. "In a normal winter, nearly 50 million people in Europe cannot properly heat their homes. This winter could be even worse. That is why we take the situation very seriously, without even mentioning our industry, which is also under pressure," continued Jorgensen. In order to "relax the market", the senior official proposed to postpone the entry into forc…
Energy prices are high in view of the war in the Middle East. With regard to winter, demand in Europe is expected to rise and with it prices. The EU is already counting the additional costs for the supply to more than 100 billion euros.
While the EU is concerned about rising bills for households, it has proposed to postpone a European law on methane emissions from imports of hydrocarbons L by one year.
The European Commission has called on capitals to reduce demand for natural gas and electricity in an effort to contain prices amid the global energy crisis that is also affecting Europe. “In a context of limited global supply and high price volatility, reducing demand can be an effective means of containing prices,” EU Energy Commissioner Dan Jorgensen wrote in a letter to EU ministers dated September 25, seen by POLITICO.
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