Europe may face a critical gas supply shortage if the Strait of Hormuz remains blocked for one to three months. This was stated by top executives of the Norwegian energy company Equinor, according to Reuters.
According to data from Gas Infrastructure Europe, gas storage facilities and tanks across Europe are filled to just over 35%, which is below the seasonal norm of around 50%. EU countries must reach the established target of 90% storage capacity between October and early December.
"If the war ended tomorrow and transit through the Strait was quickly restored, we could reach an acceptable, albeit tense, level of stocks – around 75%. But if the blockade lasts from one to three months, the situation could become critical," said Helle Ostergaard Kristiansen, Senior Vice President of Gas and Power Trading at Equinor.
Peder Bjorland, Vice President of Gas Trading at Equinor, added that high gas prices could significantly reduce consumption, which could help balance the market.
"If prices return to the levels we saw at the beginning of the war with Iran – around 60-70 euros per megawatt-hour – then in the electricity generation sector alone, gas demand could decrease by about 10 billion cubic meters," he believes.
According to a report from the Agency for the Coordination of Energy Regulators, EU countries are unlikely to be able to fill gas storage to the target level of 90% before next winter due to the strained situation in the global LNG market.
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