Russia’s state-owned gas company declared an indefinite extension of a three-day maintenance halt to gas shipments through the continent’s main energy artery, just hours after leading Western finance ministers threatened more sanctions on Russian oil.
The official justification given by Gazprom is that an oil leak has been discovered, and the pipeline cannot function without German technology imports, which are now sanctioned. Few analysts believe this is anything other than a blatant attempt to blackmail Europe over supplies.
The G7 countries, including the United Kingdom, agreed to control the price of Russian oil. This is a method of limiting the profits that fuel the Kremlin’s conflict in Ukraine, as oil exports generate more revenue than gas exports.
The effects of this
This development drove up gas prices by almost 26% after Russia indicated it will not restore its main gas pipeline to Europe.
Europe has accused Russia of blackmailing European countries over gas supply as a result of the Ukraine conflict, which Moscow denies. Since the February invasion, energy prices have skyrocketed, and Europe is attempting to wean itself from Russian energy.
Why these matters?
Although the UK and other countries around the world do not rely get gas from Russia, their move to restrict supply to Europe has increased the total cost of wholesale gas around the world.
Germany has unveiled a €65 billion (£56.2 billion) package of steps to alleviate the prospect of rising costs, as Europe struggles with limited supplies following Russia’s invasion of Ukraine.