EU warns of energy price crisis, asks countries to consider curbing demand, letter shows

‌The European ​Union is facing an energy price crisis as fallout from the Iran war roils oil and gas markets, the bloc's energy chief ‌said on Friday in a letter seen by Reuters that urged countries to consider measures to curb natural gas demand. "We are facing a price crisis linking to a supply crisis," EU Energy Commissioner Dan ‌Jorgensen said in a letter to EU countries' energy ministers.

Europe is heavily dependent on imported ‌oil and gas. Foreign suppliers cover about 80% of the bloc's gas needs, leaving it highly exposed to surging global energy prices caused by the Iran war's effective closure of the Strait of Hormuz, normally a transit route for 20% ⁠of ​the world's oil and liquefied ⁠natural gas. Europe has not yet faced supply shortages, but is grappling with soaring prices, leaving some countries struggling to ⁠fill gas storage ahead of winter, when demand for home heating peaks.

EU-wide gas storage is about 70% full, 12 ​percentage points below the same time last year, data from Gas Infrastructure Europe showed. Jorgensen said ⁠that the EU is better prepared now than it was in winter 2021 when Russia squeezed Europe's gas supplies by reducing ⁠deliveries, ​thanks to increased LNG import capacity, more renewable energy and reduced gas demand.

But he urged governments to step up preparations for the winter. "I invite you to consider taking or continuing ⁠to take measures that can sustain [gas storage] injections or reduce gas and electricity demand for as long ⁠as necessary," Jorgensen said.

Such measures ⁠could include limiting temperatures in public buildings, preventing outdoor heating and switching off unnecessary public lighting, Jorgensen said. A European Commission spokesperson did not immediately respond ‌to a ‌request for comment.