On Wednesday, soaring energy prices shocked the global market as Europe has to depend more on Russia’s supply.
So far in 2021, European natural gas prices have skyrocketed by close to 600% on the back of the anxiety that the current stockpiles would be insufficient for the winter.
Europe’s traditional gas supplier is Russia, and this time, the country seems to hold back its own gas output and increased the bloc’s dependence on its supply.
EU Commission president Ursula von der Leyen expressed her curiosity that Russia had not followed the lead of its other main supplier, Norway, in stepping up supplies even when on Wednesday, President Vladimir Putin said Russia was boosting gas supplies to Europe and stood ready to stabilize the market.
Some EU parliamentarians have also opined that Russian gas company Gazprom has not raised gas supplies to force a quicker permit for its natural gas pipeline project Nord Stream 2 which has been said would increase Europe’s reliance on the country.
Indeed, the deputy CEO of Gazprom reportedly said this week that it would prioritize its home market over export sales because it expected a cold and snowy winter. However, Russia has repeatedly denied any political agenda.
At the moment, across Europe, the underground gas storage was higher than 75% and countries have an adequate supply to cover their winter needs. Still, the region’s gas inventories are at the lowest level in 10 years.
Some EU governments have launched national subsidies and other measures to shield consumers from high energy bills.
Moving forward, EU ministers are assessing the possibility that the bloc would start jointly purchase gas to improve their bargaining position and form strategic supply reserves.
