The Perfect Storm: EU Storage Hits 30% Threshold as Qatari Supply Vanishes
Let’s talk about the dramatic situation of EU gas storage, which dropped below 30% the same day Iran struck Ras Laffan and Mesaieed, halting all Qatari LNG production.
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Let’s talk about the dramatic situation of EU gas storage, which dropped below 30% the same day Iran struck Ras Laffan and Mesaieed, halting all Qatari LNG production.
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Do coincidences happen in energy geopolitics? I honestly don’t think so. Yesterday, Iranian drones targeted and hit two of the largest facilities for LNG production in the world, paralysing Qatar’s LNG operations and causing exports to cease completely.
The Qatari Ministry of Defence has confirmed the strike, but state authorities are not disclosing the severity of the damage. This suggests we might be at the beginning of a prolonged period of reduced supplies coming from the Middle East’s largest exporter.
In parallel, EU gas storage levels dropped below the 30% threshold yesterday. This is more than eight percent below last year and just 1.5% above the levels seen on March 1, 2022, only days after Russia invaded Ukraine.
The paradox is that, at that time, the EU was still receiving a large volume of Russian gas exports through various pipelines. Today it is not, and the continent is almost entirely reliant on LNG supplies to balance the market.
This is the very supply that can no longer flow from Qatar. It is no surprise that TTF front-month gas prices—the EU price benchmark—surged by 39.5% yesterday and continue to climb by 37% this morning.
There’s a great deal of irony in the coincidence, but only if you believe that Iran struck Ras Laffan randomly.
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