Germany's Winter Gas Storage Goals Slip as Iran Conflict Keeps Prices High
German gas storage is at 50%, far below last year, as the Iran war makes summer stockpiling uneconomical.
Germany's push to stockpile natural gas before winter is becoming increasingly difficult, with the country's energy industry warning that high prices triggered by the Iran conflict are deterring companies from filling storage caverns.
Kerstin Andreae, managing director of the BDEW industry association, told Deutschlandfunk radio that reaching the government's target of 70% capacity by the start of November remains physically possible but is "getting tighter and tighter."
Data from the AGSI transparency platform showed German storage levels at just over 50% as of Thursday, compared with 76% at the same time last year. The European Union average stands at around 62%.
Energy firms typically buy gas during the summer months when demand and prices are lower, building reserves for the colder season. But the war with Iran has driven up prices, making it more profitable to sell gas on the spot market than to lock it away in storage.
Andreae said companies will keep waiting unless the economic risk is addressed, suggesting the government could make purchases more attractive through adjustments to taxes, fees, or levies, though she did not provide specifics.
The energy ministry said on Thursday there is no immediate threat to winter supplies, but confirmed it is preparing contingency measures that could be rolled out quickly if the situation worsens.
European gas prices touched fresh five-month highs on Friday morning as talks between the U.S. and Iran showed no signs of progress. The benchmark Dutch front-month contract at the TTF hub has more than doubled since the start of the year.