Michael Lewis, the CEO of the energy conglomerate Uniper, assesses the likelihood of a gas shortage as low, stating that “there should be enough gas available” in response to concerns about a prolonged disruption in the Middle East due to a potential conflict with Iran.
He noted that while 20% of the global LNG market flows through the Strait of Hormuz, this represents only 3% of the total gas market. Although LNG is a significant factor in global price formation, its volume share remains relatively small. Lewis stated that market price signals suggest expectations for the situation in the Middle East to stabilize. However, he warned that any prolonged closure of the Strait of Hormuz would significantly increase the probability of further gas price hikes. Furthermore, he emphasized that the Middle East conflict is not merely an economic issue, but a humanitarian crisis, as blocked fertilizer exports compromise one of the prerequisites for global food supply.
Regarding Germany specifically, Lewis cautioned that gas reserve filling levels are currently quite low in anticipation of the coming winter. The manager pointed out that while filling rates have increased since March, the progress remains too slow. His own company, Uniper, has even registered with the Federal Network Agency to close one of its storage facilities because it no longer sees a viable economic case for it. He warned that if German gas stocks do not fill quickly, the country will face serious problems next winter.
Looking at medium-term solutions, Lewis advocated for a regulatory model-such as the one practiced in France-where certain prices are guaranteed by a regulator through differential contracts. He considered the Austrian strategic gas reserve model only the second-best option for Germany.
Uniper has since developed a robust and resilient portfolio, eliminating reliance on the Middle East and removing its generalized risk profile, following the German government’s decision last week to begin the reprivatization process. Lewis stated that he holds no preference as to whether Uniper should proceed toward an Initial Public Offering or a private sale, observing that “there are advantages and disadvantages to all variants”. He concluded that the government must make the final decision, noting that Uniper is willing to support “all possibilities”. It is relevant to recall that Uniper was almost fully nationalized during the 2022 gas crisis after the federal government injected billions of euros to save the company due to the cessation of Russian gas deliveries.
