The moment when Russia turned off the flow of (natural) gas was almost certainly coming, but I had reckoned that it wouldn’t be for a month or two yet. Wrongly, it seems. Perhaps growing Ukrainian pressure around Kherson led the Kremlin to decide now was the moment to act. Who knows?
CNN:
Russia won’t immediately resume exports of natural gas to Europe through its Nord Stream 1 pipeline, worsening a shortage that threatens to tip the continent into an energy crisis this winter.
On Friday, Russian state energy giant Gazprom said it would not resume flows through the pipeline on Saturday as planned because it had detected an oil leak at its Portovaya compressor station. The pipeline has been shut since Wednesday for maintenance.
It didn’t give a timeline of when exports might resume.
“Until the issues on the operation of the equipment are resolved, gas supplies to the Nord Stream gas pipeline have been completely stopped,” Gazprom said in a statement.
As various people have commented, the pipeline clearly fell out of a window.
Dmitri Peskov, Putin’s spokesman, has blamed the, uh, technical problems on sanctions.
Peskov said the sanctions made it impossible to service the turbines or receive guarantees they would be repaired. “It was these sanctions, that western governments introduced, which brought the situation to what we see now,” he said.
The German government and the EU have disputed the technical justification.
“It is important to recall that there is not just one gas pipeline from Russia to Europe,” said Tim McPhie, the European Commission’s energy spokesman on Monday. “If there was a technical problem which was impeding supplies via Nord Stream 1, there would be a possibility, if there was willingness, to deliver gas to Europe through other pipelines. That’s something we’re not seeing happening.” . . .
Josep Borrell, the EU’s chief diplomat, on Monday acknowledged that certain political factions in the bloc wanted the EU to drop its support for Ukraine, push Kyiv into a ceasefire and abandon sanctions against Russia to ease economic pressure on European countries. He said those views were “not representative” of the position adopted by member states.
Borrell spoke after protests in recent days in Czech Republic and Germany against the rising cost of living and comments from Czech politicians on Monday calling for a new attitude from the EU.
Borrell, speaking alongside Ukraine’s prime minister in Brussels, said there is “clear, complete, unwavering support of all [EU] governments to our position”.
Putin’s gamble is that that unwavering support is going to start fraying at the edges or, even, center (Chancellor Scholz, I’m looking at you). Time will tell.
Meanwhile, Bloomberg reports:
Gas prices surged more than 35% on Monday as traders reacted to Russia’s decision to keep its main gas pipeline shut indefinitely. The euro slid to its lowest in two decades and equities fell. Policy makers are now grappling with how to curb demand dramatically, and also prevent wild market swings spilling into broader financial disruption.
And:
The governments of Sweden and Finland decided to create emergency backstops to help utilities struggling to trade on power markets gripped by unprecedented turbulence.
They’re setting up liquidity facilities made up of loans and credit guarantees, worth $33 billion in total, to avoid some power companies going into technical defaults as soon as Monday over surging collateral requirements. The aim is to prevent Russia’s energy curbs from sparking a financial crisis.
To say that Europe is heading into new political, economic, and financial territory is an understatement.