EU Energy Ministers will discuss possible energy demand cuts due to rising prices and supply threats from the ongoing conflict in the Middle East. A meeting on October 29 will focus on ways to reduce consumption if the Strait of Hormuz remains closed for a long time, according to a document reviewed by Euronews.
Key Details
The demand cut proposal comes from Ireland, which holds the rotating presidency of the Council of the EU. Gas prices have jumped by 140% since military actions began involving the US and Israel against Iran. Brent crude oil was trading at $110 a barrel on Wednesday. The Irish presidency warns that even if the conflict ends, its effects on oil markets could last for months. Gas supply issues may continue for years.
EU officials have noted that rising energy prices are a major result of the Middle East crisis. Energy Commissioner Dan Jørgensen has urged EU capitals to consider demand cuts for the second time since September. The EU's gas transmission operators have warned that the bloc could face a gas shortfall of 12% to 15% of demand if a severe cold snap hits this winter. As of October 20, gas storage levels were at 74%, the lowest since 2011.
Background
The Strait of Hormuz is a key chokepoint for 20% of the world's oil and gas transit. It has been affected by military actions for nearly eight months. Diesel and jet fuel supplies are especially vulnerable to price changes and possible disruptions.
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The chance of reduced energy consumption could influence oil and gas prices, especially in Europe, as supply risks increase. Investors will monitor the EU's decision on energy-saving measures and any developments in the Middle East that could further affect market dynamics.
Based on reporting by: euronews.com