Russia stopped gas supplies through Europe’s main supply route on Wednesday. This intensified the economic struggle between Moscow and Brussels and raised the prospect of energy rationing and recession in some of the richest countries in the region.
European governments are concerned that Moscow may extend the outage to retaliation against Western sanctions placed on Russia after its invasion of Ukraine. They have also accused Russia of using its energy supplies as a weapon of war. Moscow has denied this, citing technical reasons for the supply cuts.
#Russia has halted gas supplies through the critical Nord Stream 1 pipeline #Kremlin-controlled energy giant #Gazprom has said the pipeline will be shut down for three days starting this morning for planned maintenance work. https://t.co/wmNsaExV1o pic.twitter.com/XmeXPJOqNO
— Share_Talk â„¢ (@Share_Talk) August 31, 2022
Gazprom, the Russian state energy giant Gazprom, announced that Nord Stream 1, its largest pipeline transporting gas to Germany’s top customer Germany will be unavailable for maintenance starting at 0100 GMT on August 31, the outage is due to last until 0100 GMT on Saturday morning.
According to the German network regulator, Germany is now better prepared for outages because its gas storage has nearly 85% full and it is securing supplies from other sources.
“We can take gas out of the storage in winter, we are saving gas (and must continue doing so! Klaus Mueller tweeted that the LNG terminals were coming and that gas is flowing thanks to Belgium, Norway, Norway, and soon France.
Additional restrictions on European gas supplies could worsen an energy crunch. This has already caused a 400% increase in wholesale gas prices from August last year, which has squeezed consumers and businesses. Governments are now spending billions to alleviate the burden.
Nord Stream’s reduced flow has made it difficult for Europe to conserve enough gas to get through the winter months. Governments fear Russia might stop flows.
#Germany is now better prepared for outages of gas pipeline Nord Stream 1 as its gas storage is nearly 85% filled, @Klaus_Mueller, president of Germany’s network regulator, said on Twitter on Wednesday. 🇩🇪 The Nord Stream 1 outage is due to last until 0100 GMT on Saturday https://t.co/f962GMzbAN
— Share_Talk â„¢ (@Share_Talk) August 31, 2022
Commerzbank analysts wrote that “it is something of a miracle” that gas filling levels have continued to rise in Germany, noting that the country has been able to purchase enough gas at higher prices elsewhere.
Some Europeans are cutting back on their energy consumption. They are also showering at work and limiting the use of electrical appliances. Companies are worried about possible rationing.
Germany is close to meeting its Oct. 1 target of 85%, with storage tanks containing 83.65%. However, it warned that reaching 95% by Nov. 1, unless households and companies reduce their consumption would be difficult.
The European Union in its entirety reached 80.17% of its storage capacities, well ahead of the 80% target for Oct. 1, when Europe’s heating season begins.
Goldman Sachs analysts stated that their base scenario was that Nord Stream 1’s current outage would be stopped.
They stated that if it did, “there would be no more element in surprise and reduced revenues,” while low flows and the occasional drop below zero could have the potential of keeping market volatility higher and political pressure on Europe greater.
