Gas war, Putin cuts (by 40%) supplies to Germany. Prices fly

Rome, June 14, 2022 – War in Ukraine And gas war: Putinthrough Gazprompartially closes the taps at Germany, reducing further 40% its daily delivery capacity via the Nord Stream, the gas pipeline from Russia to German territory passing under the Baltic Sea. Reduction that takes effect immediately.

Gas war, Putin challenges Europe

There Russia, in short, it raises the level of confrontation with Europe by demonstrating, in case it were needed, that it has no intention of reaching respite.

What’s going on?

The strategy at this point is exactly the opposite. The intention seems to be to switch tooffensive to force European partners to capitulate using thegas weapon.

Russian President Vladimir Putin
Russian President Vladimir Putin

How much has the price increase been?

Equally fast was the rise in prices: gas rose to 97 euros per megawatt hour, an increase of 9%. In London, the price stands at 170 pence per Mmbtu (+ 10.60%). This is a severe blow to Germany’s economy, considering that just under half of the energy supplies come from Russia. Hence the resistance that Berlin has always opposed to sanctions against Moscow. But then it capitulated under pressure from European partners and the United States. The Bundesbank intervened in support of the government’s positions, announcing that the elimination of gas supplies would cost Germany 180 billion euros, equal to 5% of GDP.

Why did Gazprom cut gas in Berlin?

Gazprom justified the cut with the delivery failure of some equipment from the German Siemens group. “Gas deliveries via the Nord Stream pipeline can only be guaranteed up to a volume of 100 million cubic meters per day, instead of the expected 167 million per day,” the group said in a statement published on Telegram.

What does Nord Stream 2 have to do with it?

Obviously, it is impossible not to relate the cut in supplies with what Moscow considers to be real assaults: from stop to Nord Stream 2 (“now a pipe at the bottom of the sea”) to contacts to diversify supplies. Qatar has just announced an agreement with Total, Eni and Shell for the development of the mega field in the Persian Gulf, of which half of the new extractions will go to Europe. As well as Israel’s openness to the use of infrastructures to bring raw materials to the EU.

The controversial Nord Stream 2, twin of the current pipeline, would have transformed the Germany in hub of Russian gas in Europe, but was blocked when it was now completed. It was mainly the United States that pressed to stop the Nord Stream 2. While in Germany, former Chancellor Gerhard Schroeder, Putin’s friend and lobbyist, has also been harshly criticized in recent months for the project of the first gas pipeline, the current Nord Stream.

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