Unexpected three-day shutdown fans fears that Russian natural-gas cuts will tip Europe into recession says Georgi Kantchev for the Wall Street Journal – 19.08.22.
Russian state-owned energy exporter Gazprom PJSC said it would shut down the Nord Stream natural-gas pipeline to Germany for three days of maintenance later this month, ratcheting up the pressure on energy-starved Europe.
The unexpected move could complicate efforts by Germany and much of Europe to fill gas reserves and stave off widespread rationing to keep its population warm through the long continental winter—and avert factory shutdowns.
Moscow has already throttled back deliveries over the pipeline—its main gas link to Europe—to 20% of its maximum capacity, citing technical issues with its turbines. German and European officials have dismissed these explanations and have called the gas cuts an economic attack in retaliation for supporting Ukraine in its war with Russia.
Russia, and the Soviet Union before it, spent more than a generation building deep energy links into the heart of Europe. Cheap Siberian gas coursed reliably through pipelines for decades into power plants and home furnaces, with billions of dollars returning to Russia.
But since the months leading up to Russia’s invasion of Ukraine, President Vladimir Putin has used Russia’s stranglehold on European energy to try to divide the West. His hope, analysts say, is to counter the economic blockade of Russia by forcing financial pain in the other direction, undermining the willingness of European capitals to funnel arms and money to Kyiv.
European leaders expect Russia will keep gas flowing at a low level to toy with the region and create uncertainty. A full cutoff is also possible but would exact a cost on the energy export-dependent Russian economy, which is under strain from Western sanctions. Shutting the flow completely would leave Moscow with no more salvos to potentially fire.
Russia will continue to intermittently interrupt gas supply to Europe in the coming months to keep pressure elevated and send gas prices higher before a full interruption, said Simone Tagliapietra, a senior fellow at Bruegel, a think tank.
“European Union countries should increase action to save gas and prepare for difficult times ahead,” he said. “Winter is coming, and we cannot be unprepared.”
EU gas storages are now around 76% full, broadly in line with their historical average for this time of the year. Germany, at around 78%, has recently been filling up its storage faster than anticipated. However, even full storage might not be enough to see the region through the winter if Russian flows stop completely.
Gazprom said Friday that the maintenance would take place between Aug. 31 and Sept. 2 and if no faults are discovered, it would restore the flows at the current rate.
Gas prices in Europe, trading at record highs, rose even further on the news, with futures for gas at a trading hub in the Netherlands, the benchmark in northwest Europe, jumping more than 5%.
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Appeared in the August 20, 2022, print edition as 'Russia to Shut Off Gas Again, Testing Europe.'
Moscow has already throttled back deliveries over the Nord Stream pipeline to 20% of its maximum capacity. Photo: HANNIBAL HANSCHKE/REUTERS