Lisi Niesner | Reuters Europe has been plunged into its biggest energy crisis in decades with gas supplies from Russia becoming erratic and unpredictable even before the invasion of Ukraine began. Now, these supplies have stopped completely. Russia claims that punitive economic sanctions imposed on it by the West are responsible for the indefinite interruption of gas supplies through Europe’s main pipeline. “The problems with pumping arose because of the sanctions imposed against our country and against some companies from Western states, including Germany and the United Kingdom,” Kremlin spokesman Dmitry Peskov told reporters on Monday, according to the Russian state-run Interfax news agency. Asked whether the pumping of natural gas through Nord Stream 1 is entirely dependent on the sanctions and that supplies will resume if they are lifted or eased, Peskov replied: “Of course. legal guarantees, which prevent these legal guarantees and so on from being given.” K.”. “It is precisely these sanctions that have been imposed by Western states that have brought the situation to what we are seeing now,” Peskov added. Coming directly from the Kremlin, such comments represent the clearest indication yet that Russia is seeking to pressure Europe to lift economic measures imposed to punish Russia for its unprovoked invasion of Ukraine in order to turn the taps back on. before winter. European lawmakers have repeatedly accused Russia, traditionally its biggest energy supplier, of rigging energy exports in a bid to drive up commodity prices and sow uncertainty in the 27-nation bloc. Moscow denies using energy as a weapon. Russia’s state energy giant Gazprom has halted all exports through Nord Stream 1 since August 31, citing maintenance work on its only remaining compressor. However, while flows were due to resume after three days, Gazprom on Friday cited an oil leak for the pipeline to be shut down indefinitely. The shock announcement came after the G-7 economic powers issued a joint statement backing a proposal to introduce a price cap on Russian oil. In what energy analysts see as an escalation of Russia’s effort to inflict economic pain on the region, the Kremlin has since said that the resumption of gas supplies to Europe is fully dependent on Europe lifting economic sanctions against Moscow. A supply disruption through the Nord Stream 1 pipeline, which connects Russia to Germany via the Baltic Sea, sent European gas prices soaring on Monday, with many fearing that parts of Europe could be forced to rely on energy during the winter. It has also exacerbated the risk of recession in the region.
Gazprom v. Siemens Energy
Meanwhile, Gazprom Deputy CEO Vitaly Markelov told Reuters on Tuesday that natural gas flows through the Nord Stream 1 pipeline would not resume until Germany’s Siemens Energy repaired the faulty equipment. Siemens Energy was not immediately available for comment when contacted by CNBC on Tuesday. However, the company told Reuters that it has not currently been commissioned by Gazprom to carry out maintenance work on the turbine with the suspected oil leak, but said it remains on standby to do so. Siemens Energy added that it “cannot understand this new representation based on the information we were given over the weekend.” Gazprom Deputy CEO Vitaly Markelov told Reuters on Tuesday that natural gas flows through the Nord Stream 1 pipeline would not resume until Germany’s Siemens Energy repaired the faulty equipment. Sasha Schuerman Afp | Getty Images Mark Dixon, founder of the Moral Rating Agency, a research organization that focuses on foreign companies in Russia, said Gazprom blaming Siemens Energy for the gas cut was “yet another example of state lying by the Russian Federation”. “Russia lied in the invasion and has been lying ever since,” Dixon said. “Gazprom is Russia, make no mistake. He has no choice but to sleep with her [Russian President Vladimir] Putin”. Russia has drastically cut gas supplies to Europe in recent months, with flows through the pipeline operating at just 20% of the agreed volume before the indefinite suspension. “Russia’s move to cut gas supplies to the EU again as the region scrambles to fill its reserves ahead of winter is a further escalation of its policy in recent months to inflict economic pain through repeated supply cuts to Germany, the EU’s largest economy and natural gas consumer,” analysts at political risk consultancy Eurasia Group said in a research note. “Sources in Berlin say they are now making all winter energy plans on the assumption of zero supplies from Russia,” they added. “This means that it will now also focus on central and southern Europe, which still receives Russian gas, including through Ukrainian and Turkish pipelines.”
Winter is coming
European policymakers are currently struggling to secure gas supplies to underground facilities in order to have enough fuel to keep homes warm in the colder months. Energy analysts say Russia’s latest move to halt natural gas flows through Europe’s main supply route could worsen what was already likely to be an extremely difficult winter season. “The European energy sector continues to be rocked by price volatility and uncertainty about energy balances for the coming winter,” analysts at consultancy Rystad Energy said in a research note, noting that electricity spot prices across Western Europe have climb to “unparalleled levels”. “This latest move has significantly increased the risk that Europe will have no further natural gas flows through Nord Stream 1 for the entire winter,” they added.
