Russia has indefinitely suspended pure fuel flows by means of the Nord Stream 1 pipeline, exacerbating a squeeze on Europe’s vitality provides and deepening the recession dangers confronted within the EU.
State-owned Gazprom, which was meant to revive operations on the Baltic Sea pipeline on Saturday after three days of upkeep, stated the suspension was because of a technical fault.
The transfer got here hours after the G7 stated they had been pushing forward with a plan to strive impose a value cap on Russia’s oil exports as a part of a bid to decrease revenues flowing to Moscow that it will probably use to fund its struggle in Ukraine.
It should heighten fears in European capitals that Russia goals to additional lower provides earlier than the winter. Moscow has been accused of “weaponising” its fuel to stoke a value of residing disaster in retaliation for western assist for Ukraine.
“Gazprom’s announcement this afternoon that it’s as soon as once more shutting down Nord Stream 1 beneath fallacious pretences is one other affirmation of its unreliability as a provider,” Eric Mamer, the European Fee’s chief spokesman, wrote on Twitter.
“It’s additionally proof of Russia’s cynicism, because it prefers to flare fuel as an alternative of honouring contracts.”
Russian president Vladimir Putin has made little try to cover his objective to undermine western sanctions and cease makes an attempt by Ukraine’s allies to scale back their dependence on Moscow’s oil and fuel exports.
Gazprom had already lower capability on Nord Stream 1 since June, curbing volumes to only 20 per cent of regular ranges and triggering a greater than doubling in European fuel costs.
The corporate stated the shutdown was due to an oil leak found in the principle fuel turbine on the Portovaya compressor station close to St Petersburg, which feeds the road that runs by means of the Baltic Sea to Germany.
After leaping final week to an all-time excessive, European fuel costs have slid in current days, declining by a 3rd to €209 per megawatt hour — although that’s nonetheless about 10 instances the common degree of the previous decade.
Costs eased partly because the EU hit its goal of filling storage websites to 80 per cent of capability forward of the winter heating season. However fuel shares in storage alone usually are not sufficient to satisfy winter demand with out regular Russian export flows.
Germany and different massive European economies purpose to chop their fuel demand by 15 per cent to keep away from extreme shortages, although they might nonetheless have to introduce rationing. Blackouts are a risk. Earlier than its full-scale invasion of Ukraine, Russia met about 40 per cent of Europe’s fuel demand.
Simone Tagliapietra, a senior fellow on the Bruegel think-tank, stated the most recent announcement was a sign {that a} winter with “zero Russian fuel” ought to be handled because the central situation for Europe.
He added: “There is just one solution to put together for that: lowering fuel and electrical energy demand. This have to be Europe’s key coverage precedence.”
EU member states have additionally been searching for to diversify their fuel provides, together with by buying extra seaborne liquefied pure fuel from international locations together with the US. The entire halt of Nord Stream leaves simply two important pipeline routes supplying Russian fuel to the EU: one by means of Ukraine and one other throughout the Black Sea and thru Turkey.
A consultant for the German economic system ministry stated it had already seen Russia’s unreliability as a provider and that “consequently we’re significantly better ready than we had been a couple of months in the past”.
“We’ll attain our goal of getting [storage facilities] 85 per cent full by October already within the first few days of September,” the ministry consultant added. “We’re additionally making good progress to find various provide routes to the Russian ones and constructing import capacities for LNG.”
EU vitality ministers are because of meet in an emergency session in Brussels subsequent Friday to additional focus on their preparations for the winter, together with the methods of mitigating the affect of hovering fuel costs on electrical energy prices.
In an inside coverage paper this week, the fee stated that member states may funnel a share of inflated income generated by energy corporations to customers as a part of a plan to cushion hovering wholesale electrical energy costs in Europe.
Extra reporting by Sam Fleming and Andy Bounds in Brussels
