Last week, Germany’s economy minister accused ‘friendly’ gas supplier states and the US of astronomical prices, claiming they were profiting from the Russian-Ukraine invasion. The minister said the statement in an interview with a regional German paper last Wednesday. He singled out the problems this situation could cause, advocating for more US solidarity for energy-pressed allies. He highlighted that the US tapped into the Europe national gas reserve when gas prices surged in their states. Thus, he appealed for the same solidarity to help curb gas prices in Germany and other EU nations.
Meanwhile, another German Green Party co-leader (part of Berlin’s coalition government) advocated that the European Union must invest in additional plans to address the gas crisis in the region. In any case, many states scramble for alternative gas supplies that are facing even worse pressure. Gazprom, a state-owned gas giant in Moscow, has drastically reduced its gas supplies to the EU bloc over the past several months. The main drive for this supply cut is the country’s desire to punish Europe due to international sanctions.
Generally, the European region used to import up to 45% of its gas from Russia and has been halting imports since the invasion. According to Germany’s economic minister, the European region should pool its gas market power and coordinate synchronized and innovative purchasing plans among EU states. Hence, individual European Union states may not outbid themselves as this move could substantially raise the world market prices.
The European gas market power is substantial and is worth noting. Right now, the region faces a brutal winter with even worse gas supply shortages likely to occur across several states. Germany is one of the top states that has largely relied on gas supplies from Russia for years. The country features massive energy infrastructure like Nord Stream 2 gas pipelines and Nord stream 1, designed to supply gas to Germany from Russia through the Baltic Sea.
Overall, Nord Stream 1 remains a pawn in souring relations between Brussels and Moscow. Yet, the 11 billion dollars Nord Stream 2 gas pipeline remains unlaunched since Germany delayed certifying it after Russia invaded Ukraine. Throughout the summer EU region’s gas supplies via the Nord Stream 1 stopped, and Russia cited sanctions and maintenance needs as the cause of the halted supplies. In September, the halt of gas supplies from Russia worsened.
Most Nord Stream gas pipelines across Europe are damaged as leaks under suspicious circumstances have become common. Further reports indicate that explosions underwater to damage the pipes have occurred in several places. These explosions have dumped natural gas spewing into the Baltic Sea, but Russia denies any attempt to sabotage the oil pipelines.
It remains to be seen what steps will be taken to address this issue. At KQ Markets, we'll continue to keep a close eye on developments in the energy industry and bring you the latest news and analysis. Stay tuned for more updates and take Control of Your Financial Future with KQ Markets - A Premier Trading Platform. Don't Let Risks Hold You Back - Stay Ahead with a Well-Planned Strategy. Experience the Power of Trading with a Free Demo Trading Account from KQ Markets and Learn from Our Expert-Led Education Section. Start Your Trading Journey with KQ Markets, Your Key to Success, and take a step closer to your financial goals. Use our tools for profitable trading, such as the economic calendar, forex signals, fibonacci indicator, and pivot point calculator.
Investors Pile Out Of UK Property Funds after Bond Market Shock
Interest Rate Hikes Have Left People Gambling On Their Mortgage Rates
