Europe is on the brink of a new energy crisis. While the rapid depletion of gas reserves and possible supply cuts from Russia threaten to worsen an already difficult situation. This is what declares Bloomberg which analyzes the regional situation in the wake of US sanctions against Gazprombank, the main Russian bank for energy-related transactions, in an article published on Saturday November 23, 2024.
According to Bloombergthe European market is still recovering from the serious energy shocks suffered two years ago. The Ukrainian conflict having contributed to a 45% increase in gas prices this year. Although current prices remain below 2022 records, they would be high enough to worsen the cost of living crisis for households and increase pressure on manufacturers.
According to the media outlet, Markus Krebber, CEO of RWE AG, highlighted these concerns. “We still have gas supply problems. If we really want to be independent of Russian gas, we must have greater import capacity,” Mr. Krebber said. He warned that next winter could bring significant challenges as gas storage facilities run out quickly.
Gas storage has been crucial during the colder months. However, stocks are declining rapidly due to increased demand for heating. And this, in a context of low temperatures and the lack of wind energy for electricity production.
Despite plans to eliminate its dependence on Russian energy, the EU remains one of the world’s largest importers of Russian fossil fuels.
Note that recently, the United States sanctioned Gazprombank, the main Russian bank for energy-related transactions. It is the last major bank in the country connected to the SWIFT interbank messaging system.
According to analysts at Energy Aspects, the disappearance of one of the last transport routes for Russian gas could significantly increase pressure on the market and push up global prices. Hungary, which opposes tough measures imposed on Russia over the Ukraine conflict, said that by sanctioning Gazprombank, Washington was deliberately endangering the security of energy supplies of several European countries.
Gas prices in summer, which would normally be low enough to replenish stocks, are currently higher than those forecast for next winter, said Bloomberg. This indicates that energy costs are expected to remain high for an extended period and that, as storage levels decline this winter, it will become increasingly difficult to replenish reserves, the outlet added.
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