The Paris-based energy watchdog for developed countries, the IEA, warned that high energy prices and consumer pain from the gas crisis are calling for future mandatory storage quotas for European companies.
“We believe there are strong elements of tightness in European gas markets as a result of Russia’s behavior,” Birol told reporters, noting that “current low Russian gas flows to Europe have coincided with heightened geopolitical tensions over Ukraine.”
Russian gas company Gazprom cut exports to Europe by 25% year-on-year in the fourth quarter of 2021, despite high market prices and reduced spot sales, while other exporters boosted them, Birol said.
“The current storage shortage in the European Union is largely due to Gazprom,” he added. “The low storage levels in the company’s EU facilities are responsible for half of the EU’s storage deficit, although Gazprom facilities account for only 10% of the EU’s total storage capacity.”
Russia’s energy exports have been at the center of a standoff between Russia and the West, while Russia has built its troop presence near neighboring Ukraine, which is trying to forge closer ties with NATO.
Some European Union lawmakers have accused Russia, which supplies more than 30% of the bloc’s natural gas, of leveraging the crisis as Russia and NATO hold talks in Brussels on Wednesday.
Moscow has denied this and Gazprom has said it has fully honored European contracts.
Still, Birol said Russia could increase supplies to Europe by at least a third through abundant spare capacity, the equivalent of 10% of the EU’s average monthly gas consumption or a full LNG ship every day through commercially available pipelines.
Unlike its relations with the European Union, Russia supplies natural gas that exceeds its contractual obligations to China, Birol added.
“I think regulations in Europe need to be reviewed to ensure that storage levels are in place to meet end-user needs, with mandatory minimum storage obligations for all commercial operators.”