Russia Says It’s Stopping Critical Gas Supply To Europe Until West Lifts Sanctions

Breaking Business Russia Says It’s Stopping Critical Gas Supply To Europe Until West Lifts Sanctions Siladitya Ray Forbes Staff Covering breaking news and tech policy stories at Forbes. Following New! Follow this author to stay notified about their latest stories. Got it! Sep 5, 2022, 09:54am EDT | Updated Sep 5, 2022, 09:54am EDT Share to Facebook Share to Twitter Share to Linkedin Topline Gas supplies to Europe through the critical Nord Stream 1 pipeline will remain suspended until the West lifts its sanctions against Russia and Russian companies, the Kremlin said Monday, heightening a stand-off between Russia and the continent as energy prices soar in the region.

Supply of natural gas via the Nord Stream 1 pipeline has been halted by Russia indefinitely. dpa/picture alliance via Getty Images Key Facts Speaking to reporters on Monday, Kremlin spokesperson Dmitry Peskov blamed sanctions as the reason behind maintenance issues that have triggered the pipeline’s closure in recent weeks, state-run news agency Interfax reported —Nord Stream 1 is the main gas pipeline connecting Russia and western Europe. .

When asked if the gas supplies would resume if the West lifted its sanctions, Peskov said “of course,” claiming that those curbs have “brought the situation to what we see now. ” Peskov said the current shutdown was forced by the malfunctioning of the last operational unit of the Nord Stream 1 pipeline, as all the others had stopped working earlier due to maintenance problems. The delivery of gas through the key pipeline is not expected to resume in the “foreseeable future,” Russian business newspaper Kommersant reported , citing unnamed sources.

Prior to its invasion of Ukraine, Russian gas accounted for more than 40% of all gas imports into Europe. Big Number 81. 55%.

That is the current level at which the European Union’s gas storage capacity is filled, slightly above the bloc’s target of having 80% gas reserves available by November 1. It is unclear how Nord Stream 1’s indefinite shutdown will impact these reserves and if the EU will have to tap into them immediately and risk pushing levels below 80% ahead of November 1. News Peg Concerns about energy supply have weighed heavily on the Euro, which dropped below $0.

99 for the first time in 20 years on Monday. European gas prices climbed to a high of €282 ($280) per megawatt hour on Monday and analysts warn they may hit record highs later this week. Key Background On Friday, Russian state-run energy company Gazprom announced gas supply via Nord Stream 1 will not resume on Saturday as scheduled and the pipeline will remain closed indefinitely.

The company blamed the closure on an oil leak it had discovered on the pipeline which could not be fixed without the import of sanctioned German technology. Siemens Energy, which maintains the pipeline’s turbines, dismissed this reasoning provided by Gazprom, stating “such leaks do not normally affect the operation of a turbine and can be sealed on site. ” The suspension of supplies has raised serious concerns in the EU, which relies on Russian gas for both industrial operation and power generation.

If the supply crunch persists, several major European countries may be forced to enact gas rationing that could severely disrupt industrial output. To prevent a cascading effect on household energy prices, many European countries have announced measures like price caps, subsidies and tax cuts. Tangent The OPEC+ group of oil-producing nations announced on Monday they will slash production of crude oil by about 100,000 barrels per day starting next month.

The move could further raise energy prices. The announcement has caused the global benchmark Brent Crude futures index to rise by more than 3. 5%, pushing crude oil prices to $96.

40 per barrel, but still below record levels of $120 per barrel seen earlier this year. Follow me on Twitter . Send me a secure tip .

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