EU concerned by Iran-driven energy price spike, not planning emergency response

By Kate Abnett

BRUSSELS, March 4 (Reuters) - The European Union has warned member states about soaring gas prices caused by the Iran crisis, but saw no immediate threat to supplies and was not planning an emergency response, officials told Reuters on Wednesday.

Global oil and gas markets have been jolted by the U.S.-Israeli war on Iran and Iran's attacks across the Middle East, halting Qatari LNG production and energy shipments through the Strait of Hormuz.

Europe's benchmark gas price, the Dutch front-month contract at the TTF hub TFMBMc1, eased slightly on Wednesday, having surged to three-year highs during trading on Tuesday - peaking at 65.79 euros/MWh, more than double prices last week.

The European Commission told EU members on Wednesday on videocalls that it was concerned about soaring oil and gas prices, but said there was no immediate risk to EU supplies, four officials familiar with the discussions said.

The Commission said, for now, the EU was not planning emergency measures in response.

HIGH PRICES MAY AFFECT STORAGE FOR WINTER

Brussels is concerned that high prices could stall EU countries refilling their gas storage in the coming months. EU countries are obliged to fill their storage to 90% of capacity by November to provide a buffer of fuel for winter.

EU gas storage is currently 30% full, around 9% below levels this ⁠time last ​year, data from Gas Infrastructure Europe showed.

One of the officials said Brussels had observed no major storage withdrawals in the last few days.

Europe now gets most of its liquefied natural gas from the United States, reducing its direct exposure to supply disruptions in the Middle East. The EU imported 8% of its LNG from Qatar last year.

But governments have been on edge about the Iran conflict's impact on energy prices, following Europe's 2022 energy price surge to record peaks after Russia invaded Ukraine and slashed gas supplies to Europe. That forced industries to shutter and prompting government interventions to shield consumers from soaring bills.