Europe is considering extending the emergency gas price cap, which was implemented at the beginning of this year and is supposed to expire by the end of the year, due to fears of an escalating conflict in the Middle East, which could lead to higher gas prices this winter, the Financial Times reported.

The European Commission said there was no "indication of negative effects" since the measure came into force in February, and gas prices were now almost 90 percent below last year's high due to the war in Ukraine, according to an offer made to diplomats from the EU's 27 member states.

Diplomats and senior EU officials told the Financial Times that despite low energy prices and record EU gas stocks, supplies this winter could be affected by Israel's war on the Gaza Strip in response to the "Al-Aqsa Flood"operation carried out by the Palestinian resistance led by the Qassam Brigades against the occupation on October 7.

An EU diplomat said: "We don't know how Israel's war on Hamas will affect imports from the Middle East." He added that the Baltic Sea gas pipeline that was sabotaged earlier this month is another concern about gas flow, with Finland and Estonia reporting a leak of the 77-kilometer pipeline between the two countries, which opened in 2020.

At the height of the energy crisis, which resulted from Russia's cutting off gas supplies to Europe following its 2022 war on Ukraine, prices reached more than €300 per megawatt-hour, but not for a long period of time.

Member states eventually agreed that the cap would come into effect if prices reached €180 per megawatt hour for 3 consecutive days.

Renewable Energy

Concerned about energy availability, Germany and nine other European countries signed a paper calling for an increased focus on renewable energy, increasing the EU's target of 9.42% of its energy from renewables by 5 to 2030%, and asking members to accelerate wind farms and solar parks.

Russia's war on Ukraine shows Europe's vulnerability due to its reliance on non-renewable energy and imports of vital raw materials. This dependency poses a security risk and fuels inflation with negative effects on social cohesion and competitiveness.

It also called for easing state aid rules for renewable energy projects and improving communications with renewable energy developments in the EU's neighbouring regions.

The Commission is due to submit a proposal in November confirming any of the emergency energy measures, which include the gas price cap, and the measures and regulations allowed to ensure gas supplies are shared among member states. Voluntary measures to reduce gas demand by 15 percent have already been extended until March.

Leviathan natural gas field production platform in the White Sea off the coast of Haifa (Reuters)

Israeli Concerns

Israel considers that the war on the Gaza front jeopardizes natural gas investments. The ongoing war dealt a heavy blow to Israel's ambitions to become a hub for natural gas exports to Europe and elsewhere.

Those ambitions were boosted when U.S. energy company Chevron bought stakes in natural gas reserves at the Tamar and Leviathan fields, and when it bought Noble Energy in 2020 for $4 billion.

Natural gas fields off the Israeli coast cover about 70% of the country's electricity production and energy needs, and the Tel Aviv government approved last August a decision allowing gas production from the Tamar field to expand by 60%, starting in 2026, in order to ensure regular gas supplies to the Israeli economy until 2048, in addition to gas exports to Egypt through the Tamar field.