IEA urges governments to build strategic gas reserves amid LNG supply shocks

The International Energy Agency on Wednesday called on governments to build strategic natural gas reserves and overhaul liquefied natural gas procurement, warning that the current approach of relying on commercial storage and spot-market competition leaves import-dependent economies dangerously exposed to supply crises.aa+1

The agency's new report, Gas Reserve Mechanisms and Flexibility Options, lays out a menu of measures countries could adopt over the next five years, including mandatory commercial storage obligations, government-controlled strategic stockpiles, LNG buffer stocks, joint reserves using shared infrastructure, and cross-border stockholding arrangements. The IEA also recommended pooled LNG purchasing and emergency cargo-access agreements.aa

Two Crises in Five Years

The recommendations arrive after back-to-back disruptions reshaped global gas trade. Russia's curtailment of pipeline deliveries to Europe following the 2022 invasion of Ukraine sent prices to records and forced the continent to scramble for LNG. More recently, fighting around the Strait of Hormuz — which prior to the conflict carried roughly one-fifth of global LNG shipments — has shut down that route for an extended period, tightening supply once again.indexbox+1

The Dutch TTF front-month contract, Europe's benchmark wholesale gas price, has climbed to its strongest level since early 2023. Goldman Sachs The Goldman Sachs Group, Inc. ↗ 1.23% has warned that if Middle Eastern exports recover only slowly, the December 2026 TTF price could need to exceed EUR 100 per megawatt-hour to attract enough LNG to Europe.aleasoft+1

Europe's vulnerability has deepened further after labor strikes in March impaired two LNG production trains at Qatar's Ras Laffan facility, removing an estimated 17 billion cubic meters of annual output — roughly 17 percent of Qatar's total LNG export capacity, according to the Institute for Energy Economics and Financial Analysis. The IEA estimates repairs will take three to five years.indexbox

Preparing for the Next Shock

The IEA acknowledged that storage alone cannot address every disruption because countries differ widely in geography, infrastructure and import dependence. More flexible LNG contracts, cargo swaps and commercial innovations could complement physical reserves by allowing supply to flow more efficiently between markets during emergencies.aa

Several EU members — including Italy, Poland and Spain — already maintain national strategic gas stockpiles. Across the EU in 2025, roughly 12 billion cubic meters were held in strategic reserves, equivalent to about 3.5 percent of annual consumption. The IEA suggested governments could expand these programs and explore coordination at the EU or international level, and even floated the idea of storing 10 to 15 billion cubic meters within Ukraine once conditions permit.indexbox

Gas security is set to feature prominently at the LNG Producer-Consumer Conference, co-hosted by Japan's Economy Ministry and the IEA on Friday. Meanwhile, the European Central Bank is widely expected to raise its deposit rate by a quarter point to 2.50 percent on Thursday, with eurozone inflation running at 3.3 percent in August — driven in large part by the energy price surge the IEA's report aims to address.reuters+2