Few hours after the G-7 leaders resolved to establish a price cap on Russian oil, Gazprom decided to abandon its plans to reopen the Nord Stream pipeline. After maintenance, it was supposed to reopen on Saturday, but the business said a problem had been found.
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Gas prices have increased by four times since last year, prompting the EU to consider hitherto unheard-of energy market interventions like price ceilings, lowering power consumption, and windfall profit taxes.
For weeks, European officials have been working to lower demand while simultaneously planning for the prospect of supply shortages. Given that the economy has already contracted and the euro is losing value, the new action has further increased the pressure. Winter is approaching, and Europe's resolve to defend Ukraine in its conflict with Russia may be tested.
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The European Union claimed that Gazprom was acting "fallacious" pretences. Siemens Energy is the manufacturer of the turbines for the pipeline, and the German grid agency concurred that what Gazprom uncovered did not call for shutting off the gas. There was no remark from the Kremlin.
“Use of gas as a weapon will not change the resolve of the EU," European Council President Charles Michel said on Twitter. “We will accelerate our path towards energy independence."
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These conversations had an impact on this week's price decline. In an effort to be ready for the possibility of a Russian shutdown, Europe has been increasing its stockpile, and it has a reserve for at least some of the winter. However, when stocks fall, particularly near the end of the heating season — or if Europe experiences a severe cold snap, the situation could become considerably worse.
“The situation is tense and a further deterioration of the situation cannot be ruled out," the German Network Agency said on Saturday. “However, gas supply in Germany is stable at the moment. Security of supply in Germany continues to be guaranteed at present."
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Germany, which for years relied on cheap Russian gas to support its robust economy, is currently preparing to alter its energy strategy in the next few weeks. It is attempting to open LNG facilities while considering keeping nuclear power reactors operational, which would be a significant U-turn. Storage has already surpassed 85%.
Economy Minister Robert Habeck stated this week that Germany could no longer rely on Russia for gas at all as Moscow's efforts to squeeze Ukraine's European partners grow more apparent.
(With agency inputs)
