European Gas Storage Emergency: Commission Proposes Lower Targets Due to Iran War

The European Commission formally proposes steps to reduce energy demand and urges member states to lower gas storage targets in response to the unprecedented Iran-driven energy crisis.

Commission Blinks First: Proposing Lower Gas Storage Targets as Iran Crisis Bites

The European Commission has proposed allowing member states to lower their mandatory gas storage targets in response to the extraordinary energy market conditions created by the Iran war and the associated Hormuz crisis. According to reporting by the Financial Times, cited in the Mayer Brown Europe Daily News briefing of March 23, the Commission is also proposing steps to reduce energy demand from both households and industrial users — the demand-side complement to the supply-side emergency measures already being activated. The combination of lower fill targets and active demand reduction represents a significant policy intervention that acknowledges the severity of the supply situation.

The EU Gas Storage Regulation that was introduced after Russia's weaponisation of gas supplies in 2022 had established mandatory minimum storage fill targets for member states — a mechanism designed to prevent any single country from running low and triggering panic buying that would harm the entire European market. The proposed relaxation of these targets reflects the Commission's judgment that achieving them under current market conditions would require such aggressive LNG purchasing that it would drive prices to levels causing even greater economic damage than slightly lower storage volumes.

Energy Commissioner Dan Jørgensen confirmed in the letter he sent to energy ministers earlier this week that, notwithstanding short-term tactical flexibility on storage targets, the medium-term priority must be filling European storage as aggressively as market conditions allow before the next winter season. The window for refilling storage runs from spring through autumn; if sufficient gas is not injected during this period, Europe will face next winter with inadequate reserves and without the option of drawing on the same reserves that have cushioned previous energy crises.