The energy crisis in Europe and the war in Ukraine prompted a number of regulatory responses in the EU27. One of these responses was the so-called storage regulation, introduced in 2022 stipulating a mandatory fill-up target by 1 November each year. The target for 2022 was 80%, for the subsequent years it was set at 90%. Despite a broad consensus that for security of supply reasons it was needed, many argue that the extreame high prices in August 2022 were partly driven by this regulatory intervention. The regulation was to be applied only temporarily until 31 December 2025. 

Whether a storage obligation should be in place has been discussed among academia and stakeholders when the Commission prososed to prolong it after 2025. This policy brief contributes with a modelling based quantitative analyis to this debate. We find that the impact of a storage obligation depends largely on the state of the LNG market. In times of oversupply and low JKM prices, such an obligation may impose unnecessary costs, making it more efficient to let market players manage storage activity and bookings on their own. However, in a balanced or tight market with higher JKM prices—such as the current situation—a storage obligation proves beneficial, acting as a form of insurance against price spikes.