Netherlands better equipped against rising gas prices, Minister says
The war in the Middle East has resulted in rising gas and oil prices, and has everyone thinking back to skyrocketing energy bills following Russia’s invasion of Ukraine in 2022. Power companies are being flooded with questions. But according to Minister Eelco Heinen of Finance, it is too early to panic. The Netherlands is much better equipped to withstand price shocks than in 2022, he told RTL Z.
When Russia invaded Ukraine four years ago, Europe was still heavily dependent on oil and gas from Russia. Since then, the Netherlands has changed its imports, the Minister said. The Netherlands now gets most of its gas from the United States and Norway, among other places, and even sources some domestically. That makes us less vulnerable, he said.
Heinen also sees that reflected in the market’s reaction. Oil and gas prices are rising, but it’s nowhere near as severe as when the war broke out in 2022. “It’s evident that it’s having an impact,” Heinen said, but added that it’s too early to speculate what the longer-term impact will be. “That really depends on how long this lasts and whether the conflict escalates,” he told RTL. “We certainly hope not.”
Many energy suppliers are being flooded with questions, NOS reported. Essent received twice as many calls as usual. “And that number is expected to double today,” a spokesperson said. Vattenfall reported a “significant increase” in calls from people wanting to know “if the situation will affect their bills.” Eneco’s customer service is also receiving more calls.
“It is impossible to predict what the prices will do,” Vattenfall told the broadcaster. The company has partially stopped offering fixed contracts due to the current unpredictability of the market.
The higher gas prices are due to Israel and the United States’ attacks on Iran. Iran responded by closing the Strait of Hormuz, a very important shipping route for liquefied natural gas (LNG). The blockade of the sea route is leading to global concerns about gas availability.
“The Netherlands itself is not very dependent on gas from the Middle East, but Aisa is,” energy expert Martien Visser told NOS. The price of gas is rising partly because Asian countries are eyeing the same gas as the Netherlands, including from the United States. “Europe and Asia are essentially being played off against each other to bid higher,” Visser said. “That’s how the market works.”
The Dutch gas stocks are currently at a historically low level, being only 11 percent filled after the winter. “For a long time, there was an expectation that there would be a lot of liquid gas available this summer,” Visser said. “That’s why major energy companies have postponed replenishing the gas supply.” That will likely now be more expensive.
Visser also stressed that the Netherlands is not in trouble yet and can get by with its current gas supplies for the time being. “That has to do with the warmer weather,” he said. “However, it is important that the gas supply is sufficiently full by the end of summer to get us through the winter.”
