The decision of state-run Russian gas monopoly Gazprom to cease exports through the Nord Stream 1 pipeline indefinitely caused the price of gas to increase by around a third when the Dutch TTF gas futures market (Europe’s principal gas exchange) opened on Monday, September 5.
Gazprom has previously used technical issues to support its decision. According to them, the most recent shutoff is the result of an oil leak in one of the pipeline’s compressor stations.
Gazprom frequently attributes low gas flows to technical problems, although experts contest these assertions. European politicians see Russia’s shutdown of the Nord Stream pipeline as an intentional effort to exert political pressure on the European Union Member States. Robert Habeck, the energy minister for Germany, has accused the Kremlin directly of using gas “as a weapon” against Europe.
According to an analyst at the UK investment bank Liberum Capital, it would result in an immediate recession in both the German and Eurozone economies. Investors anticipate significant losses when the European stock markets open on Monday as businesses struggle with the energy interruption.
On Monday morning, the price of gas increased by around 26%, reaching a high of €268 per megawatt hour. Gas prices dropped by roughly 40% last week. Gas dealers think it is improbable that Russia would start up the Nord Stream pipeline again for gas delivery.
Russia now transports gas to the EU via the Yamal pipeline via Ukraine. As supplies are also insufficient to make up for the Nord Stream pipeline’s interruption, these pipelines are susceptible to disruption from fighting or shutting down by Russian forces.
Except for Serbia and Hungary, who receive supplies through the Turkstream pipeline and are favourable to Russia, Gazprom has decreased deliveries through all of its main channels.
Currently, European countries are rushing to establish economic safeguards to safeguard consumers and enterprises. On September 4, Germany made the announcement that it would reserve more than €65 billion in further support measures.