EU energy ministers met on Thursday to discuss energy security ahead of the winter heating season, as the wars in Iran, Ukraine and Yemen send oil and natural gas prices soaring. Fighting has damaged refineries across the Middle East and Russia and hampered oil and gas flows through the Black Sea, the Red Sea and the Strait of Hormuz. EU Energy Commissioner Dan Jorgensen warned on Wednesday that the situation was very serious, and argued that affordability was just as urgent as supply, since available energy means little to households and businesses that cannot afford it.

Storage thinner than a year ago

The EU is entering winter with gas stocks at only 75% of available storage, against 83% a year ago. European wholesale gas prices briefly touched €100 per megawatt-hour on Wednesday for the first time since December 2022, and are now trading at around triple their pre-Iran war levels. November delivery futures at the Dutch TTF hub were trading at around €96 per megawatt-hour on Thursday, after climbing from below €70 in early September, partly because Qatari liquefied natural gas supplies have fallen to a quarter of pre-war levels amid the effective closure of the Strait of Hormuz.

A €130 warning if winter turns cold

Analysts cited on Thursday warned that prices could reach €130 per megawatt-hour early next year if temperatures fall sharply, a level that could prompt governments to intervene to curb demand. Ministers were also due to discuss a Commission proposal to cut electricity bills through tax and grid fee reforms, such as taxing electricity at a lower rate than natural gas, and the Commission began talks with refineries on Wednesday on ways to boost output. Western powers also agreed this month to accelerate the release of more than 400 million barrels of emergency oil stocks after US pressure.

Sources: Reuters via BusinessWorld, AzerNEWS.