Remember when Europe faced those “unprecedented risks” to its natural gas supply earlier this month? That was then. Now, the continent is basically swimming in it.
Driving the news: Natural gas prices in Europe have plummeted by 70% since August because Europe has stockpiled enough for the winter and it’s been an unusually warm fall.
- Europe is the world’s biggest importer of natural gas, a fossil fuel used for electricity and heating (the energy source was touted as “the new oil” just a few months back).
Tankers carrying the stuff are now loitering at European ports as they wait for their turn to drop off orders, and some have even opted to float off elsewhere in search of a better price.
Why it’s happening: In spite of the haters (read: Russia), European countries filled up their natural gas reserves to over 90% of capacity after an aggressive global buying spree.
- The EU’s voluntary energy restriction measures (set to take place from December to March) will tamp down on energy usage and keep those reserves robust.
Why it matters: A sustained drop in energy prices would help reduce inflation in the region and keep money out of Russia’s coffers. Plus, the sure supply could save lives this winter.
Yes, but: Experts believe the price drop could be a blip as Russia continues to restrict gas flows and demand picks up in Asia, and stockpiles don’t solve the problem for businesses.
Zoom out: As the world faces its first “truly global” energy crisis, Europe’s current reprieve from high gas prices is one piece of the increasingly complicated global energy puzzle.