IEA weighs in on escalating gas prices

The International Energy Agency (IEA) said September 21 that Russia could do more to alleviate escalating natural gas prices.

European natural gas prices are up nearly 300% and prices in the US are up more than 100% so far this year. Tight supplies, warmer temperatures and inflation are the primary culprits behind escalating commodity prices in general.

IEA director Fatih Birol said both conventional natural gas and LNG were at a premium given the myriad of industry pressures this year. Russia, a primary gas supplier for Europe, could do more to address the situation, however.

“Based on the available information, Russia is fulfilling its long-term contracts with European counterparts – but its exports to Europe are down from their 2019 level,” a statement from the IEA read. “The IEA believes that Russia could do more to increase gas availability to Europe and ensure storage is filled to adequate levels in preparation for the coming winter heating season.”

Western powers have focused their frustration squarely at Russia, which sends gas to the European market via state-controlled energy company Gazprom. Gazprom this week boasted that supplies to Turkey, an energy bridge to Europe, are at record levels, though some officials are not convinced.

A group of 40 European Parliament lawmakers, mainly from Poland and the Baltic States, sent a letter to the European Commission calling for an investigation into Gazprom's alleged manipulation of European gas prices. US energy secretary Jennifer Granholm echoed that complaint earlier in the week.

Meanwhile, the Qatari minister of energy said September 21 at an industry conference in Dubai that soaring natural gas prices were the result of a lack of investments.

“There is a huge demand from all our customers, and unfortunately we cannot cater for everybody,” he was quoted by the Reuters news service as saying. “Unfortunately, in my view, this is due to the market not investing enough in the industry.”