IEA Says Risk Of Gas Shortage Looms For Europe

Europe faces “unprecedented risks” to its natural gas supplies this winter after Russia cut off most pipeline shipments, the International Energy Agency (IEA) has said.

The Paris-based agency said in its report on Monday that global gas markets are expected to remain tight next year as Russian pipeline gas supplies dwindle and gas demand falls in Europe in response to energy-saving measures and high prices.

The IEA added that natural gas markets worldwide have been tightening since 2021 and global gas consumption is expected to decline by 0.8% this year as a result of a record 10% contraction in Europe and flat demand in the Asia Pacific region.

It further disclosed that European Union countries would need to reduce use by 13% over the winter in case of a complete Russian cutoff amid the war in Ukraine.

In Europe, gas consumption has fallen by 10% in the first eight months of this year compared with the same period in 2021, driven by a 15% drop in the industrial sector as businesses curtailed production due to soaring prices.

The IEA said that if Russian supply to Europe completely stops from Nov. 1, EU gas storage would be less than 20% full in February if the LNG supply remains robust.

But if the LNG supply dwindles to low levels it could be 5% full by February.