France hit with lowest gas levels in Europe as strikes choked imports
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The economy is now exposed to more vulnerability as the country struggles to secure critical energy resources for the upcoming winter.
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Cars queue to fill their fuel tanks at a Total petrol station in Paris, France, October 8, 2022. (Reuters)
A report by The Telegraph on Thursday revealed that France officially recorded the lowest levels of gas reserves in Europe amid a nationwide crisis that has been crippling gas imports.
According to data from the International Energy Agency, France's reserves were recorded at 28% against 56% across Europe.
This is owed to the fact that the country's economy has been struck by demonstrations over French President Emmanuel Macron's controversial reform of the pension program in France.
The economy is now exposed to more vulnerability as the country struggles to secure critical energy resources for the upcoming winter.
Throughout February and March, protesters have taken the streets to voice their opposition against the pension reform.
The strikes resulted in the disruption of import terminals where gas is being shipped from abroad to be refined in France's refineries.
For instance, one terminal in Durkirk was disrupted for 11 days in March, while others were also forced to pause operations as in the Fos des Cavaou terminal located in the south.
The IEA said imports of liquified natural gas fell 55% in March compared to a year ago. Ships that were destined to reach France's terminals were diverted to other ports such as in Greece, Spain, and the UK.
"As a result, France has been forced to lean on its storage inventories," the IEA states.
Read more: French Constitutional Council rejects 2nd referendum on pension reform
Neither was France's electricity output spared from the consequences of the strikes, The Telegraph reported. Britain reportedly produced additional coal-fired power units in case France found itself in dire need of energy sources.
The IEA forecast a very uncertain future for France's gas market amid rapidly cooling prices in recent months. It said that on Wednesday, European natural gas prices fell to their lowest in 21 months.
Despite record imports of liquified natural gas (LNG) on the continent, Dutch front-month futures fell as much as 1.9% to below $37 per megawatt hour.
However, "Global gas supply is set to remain tight in 2023 and the global balance is subject to an unusually wide range of uncertainties," the IEA stated.
"These include adverse weather factors, such as a dry summer or a cold fourth quarter, lower availability of LNG and the possibility of a further decline in Russian pipeline gas deliveries to the European Union," it added.
In the year 2022, global consumption dropped 1.5%, the IEA said, adding that the fall was largely the result of declines in both Europe and Asia, where gas prices soared.
As of today, Russia is currently supplying Europe with 10% of the EU's gas. Prior to the war, Russia was supplying over a third of Europe's gas needs.
Sanctions on Russia had led to a strengthening of the US foothold in the energy markets. Projections forecast that the US is set to become the largest exporter of LNG this year.
