Russia deepens Europe's energy crisis with new gas halt

2022-08-31 19:16:47
Russia deepens Europe's energy crisis with new gas halt

Russia halted gas supplies via Europe's key supply route on Wednesday, intensifying an economic battle between Moscow and Brussels.

Russia’s latest gas halt also raised the prospects of recession and energy rationing in some of Europe's richest countries.

European governments fear Moscow could extend the outage in retaliation for Western sanctions imposed after its war with Ukraine and have accused Russia of using energy supplies as a "weapon of war".

Moscow denies doing this and has cited technical reasons for supply cuts.

Russian state energy giant Gazprom said Nord Stream 1, the biggest pipeline carrying gas to its top customer Germany, will be out for maintenance from 0100 GMT on Aug. 31 to 0100 GMT on Sept. 3.

Further restrictions to European gas supplies would deepen an energy crunch that has already triggered a 400% surge in wholesale gas prices since last August, squeezing consumers and businesses and forcing governments to spend billions to ease the burden.

In Germany, inflation soared to its highest in almost 50 years in August and consumer sentiment soured as households brace for a spike in energy bills.

Moscow, which slashed supply via the pipeline to 40% of capacity in June and to 20% in July, blames maintenance issues and sanctions it says prevent the return and installation of equipment.

Kremlin spokesman Dmitry Peskov said on Wednesday that Russia remained committed to its gas supply obligations, but was unable to fulfil them due to the sanctions, according to the Interfax news agency.

Gazprom said the latest shutdown was needed to perform maintenance on the pipeline's only remaining compressor at the Portovaya station in Russia, saying the work would be carried out jointly with Siemens specialists.

Russia has also stopped supplying Bulgaria, Denmark, Finland, the Netherlands and Poland, and reduced flows via other pipelines since launching what Moscow calls its "special military operation" in Ukraine.

Gazprom said on Tuesday it would also suspend gas deliveries to its French contractor because of a payments dispute, which France's energy minister called an excuse, but added that the country had anticipated the loss of supply.

Europeans are voluntarily cutting their energy consumption, including limiting their use of electrical appliances and showering at work to save money while companies are bracing for possible rationing.



Error! Error occured!