Berlin, Germany – Europe is entering winter with historically low gas reserves and cannot withstand further supply shocks, Fatih Birol, head of the International Energy Agency, has warned, as the US-Israel war on Iran disrupts global supply chains. Speaking to Al Jazeera on the sidelines of an international conference in Berlin on Wednesday, Birol said all regions are being hit by energy disruptions in the Strait of Hormuz but that Europe is particularly vulnerable and will likely face rising costs of liquefied natural gas (LNG) in the coming months – even if peace returns to the Gulf today. Nearly a 10th of the continent’s LNG transited through the Hormuz Strait before the war.
However, Iran’s attacks on vessels have plummeted imports. As the winter chill settles, the European Union’s natural gas storage is only 72 percent full, down from the usual 90 percent. The shortfall is equivalent to the energy needed to power 10 to 12 million homes, analysts say.
EU energy ministers are now mulling over whether they should ask households and businesses to ration consumption, according to news reports. Birol said he had long thought about the dangers of relying on the Strait of Hormuz. In fact, he said, his standard question to recruits seeking to join his agency was often: What would they do if the strait shuts down today?
The fallout has hardly come as a surprise. The flare-ups in the alternative Bab al-Mandeb strait, he added, have only worsened things. Now, everybody is in a hurry, taking measures; the Middle East countries are building new pipelines, expanding the new pipelines that are bypassing the Strait of Hormuz … but in my view, these efforts should have been done much earlier.” The EU, whose ageing refineries have processed less crude in recent years, also faces shortages of imported refined products such as the diesel that powers the bloc’s trucking, agricultural and industrial sectors.
Birol said Ukraine’s attacks on Russian refineries were also behind a looming diesel scarcity. About a third of Russian deliveries have stopped coming, he said. When the Group of Seven (G7) nations agreed to push 400 million barrels of crude and diesel from their strategic reserves in March, it was Birol who coordinated how those emergency stocks reached global markets – the third time he has had to oversee emergency stock releases since Russia’s invasion of Ukraine in 2022.
For years, the energy economist said, his agency warned that the bloc was too tethered to Russia’s fuel, and that it had turned away too early from nuclear-generated power, which gave countries domestic leverage. When Russia invaded Ukraine, his warnings manifested after Moscow cut gas supplies in retaliation for sanctions. The EU plans to permanently phase out Russian gas, but amid the Gulf crisis, members like France have again stepped up orders.
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