France gas reserves dented by strikes

France now has the smallest gas stocks in Europe, mainly as a consequence of disruptive strikes against President Emmanuel Macron's unpopular pension reforms, according to a report.

At the end of March, the country's gas reserves had reached 28 percent, significantly lower than the European average of 56 percent, said the International Energy Agency.

Macron's policy to increase the pension age to 64, now signed into law, prompted widespread industrial action in February and March.

The strikes caused delays at gas import terminals, including Dunkirk and Fos Cavaou, hindering efforts to prepare reserves for the upcoming winter, said the IEA, as reported by The Daily Telegraph newspaper.

Liquid Natural Gas, or LNG, shipments to France dropped 55 percent in March compared to the year before, due to the strike action, said the agency. Consequently, many vessels were diverted to other ports in Europe, including Spain, Greece, and the United Kingdom, it noted.

The IEA said: "As a result, France has been forced to lean on its storage inventories."

In its report released on Thursday, the IEA cautioned that the gas market forecast remains uncertain, despite falling prices in recent months. It noted that Dutch front-month future prices, the European gas benchmark, dropped to 21-month lows of under $37 per megawatt hour on Wednesday due to record LNG imports.

However, the IEA warned: "Global gas supply is set to remain tight in 2023 and the global balance is subject to an unusually wide range of uncertainties.

"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."

Global gas consumption decreased by 1.5 percent in 2022, according to the IEA, primarily due to a rise in prices in Europe and Asia.

It said Russia's share of the European Union's gas supply has dropped to 10 percent, from over a third before the outbreak of the Russia-Ukraine conflict. Consequently, the United States is emerging as a major player in gas supply, and is projected to become the world's largest exporter of LNG this year.

Separately, France's Constitutional Council rejected a bill put forward by opposition lawmakers on Wednesday to hold a referendum on reverting the retirement age back to 62, reported the Associated Press.

It marked the second time the top constitutional body has dismissed this kind of effort to undo Macron's pension reforms. Opponents argue there are other ways to finance the pension system.

The proposed legislation failed to meet the conditions of the French Constitution, which requires it to address "social policy reform". Labor unions this week urged more protests and strikes against the pension measures to take place on June 6.