After the pandemic, is energy the next European crisis? Gas prices have hit new records, reaching $180 per barrel in the Netherlands, representing a fivefold increase over the past six months. This is driven by news that Russia has diverged gas flows from its main European pipeline to one that is going east via Poland. Experts are pondering over the reasons, be it geopolitical muscle-flexing or the fact that Russia is hit by a cold front of minus 20 degrees. The results are the same: Vladimir Putin promised more gas for Europe, and it is still not coming. The prospect of a Russian invasion in Ukraine just adds more uncertainty and pressure on the market.
Europe still depends on Russian gas, amounting to 35 per cent of European supply. Will there be enough gas to get through the winter? European wholesale buyers remain discrete over how much they get. Will there be hoarding and other beggar-my-neighbour tactics in times of shortages? Will this trigger a common procurement procedure similar to the vaccines? Will Europe divide over energy? Lots of questions and no clear answer yet.
France usually is an electricity exporter but is now forced to import electricity and even burn fuel oil
Even in France, the nuclear power nation, there are surprise shortages emerging.
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