Expert predicts a difficult winter for the European Union

Winter promises to be challenging for the European Union (EU), as gas reserves are depleting at a rapid pace and dependence on liquefied natural gas (LNG) is growing amid supply uncertainty and competition with Asian markets. Iqbal Guliyev, deputy director of the International Institute of Energy Policy and Diplomacy at MGIMO and author of the Telegram channel IG Energy, told Izvestia on December 24.

Earlier in the day, the Financial Times reported that the EU is emptying its gas storage facilities at the fastest pace since the energy crisis began in 2022 amid cold weather and reduced sea imports. Europe's gas storage level is currently at 75%, down from close to 90% in December 2023. According to Gas InfrastrUcture Europe, the amount of gas in EU storage has fallen by about 19% since the end of September.

"The long-lasting effects of the European energy crisis continue to have a significant impact on the region's gas markets. Gas remains a key fuel for heating, power generation and industry, becoming a strategic resource on the availability of which not only the sustainability of the economy, but also social stability depends," Guliyev said.

According to him, this winter promises to be challenging for the EU, as gas reserves are depleting at a rapid pace and dependence on LNG is growing amid supply uncertainty and competition with Asian markets.

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"The lack of generation from alternative energy sources will also contribute (electricity production from RES was below forecasts due to weather conditions)," the expert specified.

He reminded that along with the possible termination of gas transit through Ukraine, the situation will be aggravated by Qatar's position on supplies to Europe.

"Qatar has warned about the possible termination of gas supplies to the EU in case of fines under the Directive on Due Diligence of Corporate Sustainability. The directive allows fines of up to 5% of a company's annual global revenue if management fails to address negative impacts on human rights or the environment. Qatar, which has long-term LNG supply contracts with Germany, France, Italy and the Netherlands after 2022, is strengthening its role in the European gas market," Guliyev concluded.

Back in November, the Financial Times warned that EU countries could face disruptions in gas supplies in winter. Analysts linked one of the risks to the limited supply of LNG on global markets, which could lead to Europe having to compete with Asia for this type of fuel and result in higher prices.