energy prices in europe continue to rise, and tens of millions of european households could fall into “energy poverty” this winter because they cannot afford heating. europe could face “stress tests” in the form of cold snaps and unexpected power outages in the coming winter, the international energy agency has warned.
europe and the united states are joining forces to pressure russia to increase gas supplies as the “culprits” of rising energy prices, such as natural gas. in fact, russian gas exports have not violated the contract signed with the european side, european energy prices have various reasons.
Europe is facing an energy crisis
SINCE LAST YEAR, EUROPEAN GAS PRICES HAVE CONTINUED TO RISE AND BREAK RECORDS. EUROPEAN GAS FUTURES PRICES HAVE SOARED TO A RECORD 100 EUROS PER MEGAWATT HOUR. DUTCH TTF GAS FUTURES HAVE RISEN MORE THAN 250 PER CENT SO FAR THIS YEAR, UP 70 PER CENT SINCE AUGUST ALONE.
quusi kwarten, the secretary of state for business, energy and industrial strategy, told a meeting of the house of commons that the uk was preparing for any change in gas prices.
europe’s gas prices have soared, as have electricity prices. electricity prices in the uk have tripled from a year ago, in spain by twice as much since december and by 50 per cent in germany. france has announced that it will provide energy subsidies worth 100 euros to 5.8 million low-income families.
rising energy prices have hit economic activity, affecting production activities in energy-intensive industries such as steel and chemicals. several of britain’s biggest fertilizer producers have announced production cuts, and as the industry relies on carbon dioxide from fertilizer producers for food processing, preservation and slaughter, food industry officials say the country faces a food crisis if the shortage is not addressed.
energy ministers from eu countries met on september 22nd to discuss measures amid widespread concerns that rising energy prices could hit europe’s economic recovery. after the meeting, the european commission said it would work on a new “policy toolkit” for member states to deal with rising energy prices without violating eu regulations.
the paris-based international energy agency has warned that europe could face “stress tests” in the form of cold snaps and unexpected power outages in the coming winter.
experts at wood mackenzie, a consultancy in the uk, believe gas prices are likely to remain high due to this winter’s cold snap. european countries enter the heating season, energy demand is expected to increase significantly, europe is afraid of facing an energy crisis.
“shake the pot” russia
there is now public opinion in europe that russia is the “main culprit” of rising gas prices, that russia intends to limit gas exports, to raise gas prices to promote the “north stream-2” gas pipeline project.
european gas reserves are significantly below the five-year average, the international energy agency said in a statement. russia could do more to increase gas supplies to the european market and ensure storage facilities are adequate to prepare for the coming winter. the statement said it would be an opportunity for russia to demonstrate its reputation as a reliable supplier to the european market.
some members of the european parliament have questioned russia’s intention to limit gas exports to europe, causing prices to soar, boosting household energy bills in europe and threatening industries across europe, and calling for an investigation into exporter gazprom.
the united states has also taken the opportunity to provoke russian-european relations and pressure russia to increase its gas supply to europe. amos hokstein, a senior adviser on energy security at the u.s. state department, said in an interview that some eu-european union countries may not have enough reserves to cope with the winter and that russia should increase gas supplies to europe through ukraine as soon as possible.
in addition, the united states recently arrested and indicted mark jetvoy, chief financial officer of russia’s novotek gas. mark jetvoy is regarded as one of the most influential executives in the russian gas industry.
an article on russia today’s website said many people in europe were targeting russia in the face of soaring gas prices and that their accusations were “indefensible”.
in fact, there are various reasons for the rise in gas prices in europe. experts believe that the increase in natural gas prices is the result of a combination of economic, natural and political factors, and demand growth, europe’s energy policy transformation and other factors are related.
xu poling, director of the russian economic office of the russian institute of eastern europe and central asia at the chinese academy of social sciences, said russia’s gas supply to europe in recent years has peaked in 2018, decreased in 2019 and 2020, and is close to its 2018 peak this year.
how russia responded
russia has made it clear that current gas exports to europe do not violate the contract signed between the two sides. russian president dmitry peskov said that russia has fulfilled all its obligations to consumers in the eu market, russia’s gas supply to europe is close to the highest level on record.
this claim is supported by the international energy agency. the iea statement confirmed that russia is fulfilling its obligations to supply gas to europe within the framework of the contract.
in response to european calls for russia to increase supplies, russia said it needed additional orders. peskov said the gas deal would start with a sales agreement before production and transport, so if the eu wanted to increase russia’s transit supply through ukraine, it should increase purchases after the contract expires in 2024.
in response to u.s. demands for additional supplies of russian gas through ukraine to europe, peskov said it was “negative propaganda” against russia.
gazprom president michael miller said recently that the european union will enter the heating season, the current gas reserve gap of about 30 billion cubic meters, and russia is determined not to fill the gap.