The global energy crisis caused by russia's invasion of Ukraine has changed the structure of natural gas markets – IEA
The report highlights that the market requires a closer dialogue between suppliers and consumers, who are keen to ensure both short-term and long-term reliability of supplies and reduction of emissions
russia's invasion of Ukraine in 2022 caused the first truly global gas crisis, when natural gas and LNG markets faced supply disruptions and unprecedented price volatility. While the immediate effects of last year's supply shock have subsided in recent months, the structural changes that occurred in 2022 will persist for years – and should be taken into account by both policymakers and market participants.
This is reported by the IEA in their report.
It is noted that in this context, the architecture of global gas supply security and the underlying market flexibility require careful reassessment through an increasingly closer dialogue between suppliers and consumers.
"Ensuring reliable LNG supply will require policymakers to have closer coordination with private players and will promote the development of innovative commercial propositions, new procurement mechanisms, and new cooperation terms," the agency writes.
According to the IEA, a high level of storage in key Asian and European markets gives grounds for cautious optimism ahead of the 2023-2024 winter heating season in the Northern Hemisphere. If storage filling continues at the rate observed from mid-April, EU storages will reach 90% of their working capacity by the beginning of August and may be nearly 100% full by mid-September (with a target of 95% by 1 November);
According to the report, the main uncertainty remains ahead of the heating season. A cold winter coupled with a complete cessation of russian gas supplies to Europe at the start of the heating season could reignite market tension. There could also be stiff competition for gas supplies if the weather in Northeast Asia is colder than usual and economic growth in China is stronger than expected.
Background. Mind previously reported that European natural gas prices are falling as supplies from Norway have sharply increased.
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