World Desk, AnyTV, Brussels
Published by: Shiv Sharan Shukla
Updated Tue, 01 Mar 2022 08:53 PM IST
Summary
The day that Russia invaded Ukraine, the price of natural gas in the EU jumped sharply to almost one and a half times. The price per megawatt-hour of natural gas that day was recorded at EUR 138.
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Significantly, the day Russia attacked Ukraine, the price of natural gas in the EU had jumped sharply to almost one and a half times. The price per megawatt-hour of natural gas that day was recorded at EUR 138. Since then, experts have been fearing that sanctions on Russia could lead to a complete halt in Russian supplies of crude oil and natural gas to Europe.
German Chancellor Olf Scholz on February 22 announced a halt to the approval process for Nord Stream-2, a pipeline for gas supply from Russia. After that it has been decided to exclude many Russian banks from the international payment system SWIFT. Because of all this, there is a possibility of deepening the energy crisis in Europe.
Meanwhile, European Commission President Ursula von der Leyen has expressed confidence that if the gas supply from Russia is disrupted, it will not have much effect on the EU. “Europe, with the support of its friends around the world, will be able to compensate for the Russian LNG (liquefied natural gas) shortage,” he said. He said- ‘This crisis has shown that Europe is highly dependent on Russian gas. So now we have to find different suppliers, as well as invest more in renewable energy sources.
The crisis is already beginning to deepen in many European countries. Estonia’s politicians have admitted that their gas reserves have dwindled to record levels. Estonia is completely dependent on Russia for gas supplies. In such a situation, now Europe’s hope rests on American LNG supply. This supply increased significantly in February. According to gas market watch agency Refinity, half of the gas exported from the US in February was sent to Europe.
Simi Taglipietra, senior fellow at the Brussels-based think tank Bruegel, has said Europe will suffer disruptions in Russian gas supplies until spring, but, considering next winter, the situation looks complicated. Anyway, the economic consequences of this blockage will be serious in any case. But Taglipietra said that since Russia’s energy payments are excluded from the sanctions, it is unlikely that Russia will deliberately block the supply.
Last month researchers from Bruegel released a research paper. It was said in it that if Russia stopped the gas supply, then it would not be possible to fully compensate it. In that case the European Union would have to control the demand. It is worth noting that 40 percent of Europe’s gas supply comes from Russia. Germany depends on Russia for 55 percent of its gas needs.