Return to Russian gas can be historic mistake – head of IEA
Fatih Birol, Executive Director of the International Energy Agency (IEA), said on Friday, March 6, that turning back to Russia for gas supplies would be economically and politically wrong, given the expected influx of liquefied natural gas to global markets.
According to Ukrinform, he stated this in an interview with Reuters.
"The current crisis in the Middle East has led to questions in some quarters about whether to go back to Russia or not," Birol said, after a meeting between Ursula von der Leyen, President of the European Commission, and EU commissioners responsible for global energy markets.
"One of Europe's historical mistakes was the over-reliance of its energy sources on one single country, Russia," he added.
The EU is facing increasing pressure from industry and governments to take measures to contain high energy prices. Von der Leyen has promised to prepare possible solutions that EU leaders will consider at a summit later this month.
Among the options under discussion are reducing taxes and tariffs that increase energy bills in many countries, or allowing governments to use more state aid to support energy-intensive industries, two EU officials told Reuters.
However, officials and analysts acknowledge that there is no quick solution, and EU governments remain divided. Europe's reliance on imported oil and gas makes the continent highly vulnerable to fluctuations in global prices, which surged this week following the escalation of the Iranian crisis.
Birol also said the IEA expects a massive volume of liquefied natural gas (LNG) to enter the market over the next five years, which should help reduce LNG prices.
"We expect in the next five years a huge amount of LNG wave, about 300 BCM of new LNG coming," he said.
Birol added that, for now, IEA member countries are not planning a collective release of strategic oil reserves in response to the Middle East conflict, although all options remain open. Members of the agency are required to maintain oil reserves covering 90 days of consumption for potential emergency use.
Any release would require collective agreement by governments that such action is justified based on market conditions.
"At this stage, we are not there," Birol emphasized.
Earlier it was reported that gas prices in Europe have risen and are now almost twice as high as before the U.S. and Israeli strikes on Iran. In response to the military actions, Iran opened fire on ships in the Strait of Hormuz, through which about 20% of global seaborne oil and LNG supplies pass.
The President of the United States, Donald Trump, ordered military escorts and risk insurance to be provided for oil and gas tankers passing through the Strait of Hormuz.
Photo: x.com/fbirol