February 3, 2023

Athens News

News in English from Greece

Panic in the markets and record fuel prices in the EU – a reaction to calls to abandon energy resources from Russia

A “gas riot” has begun in the European Union, sharp statements are heard from the leaders of European countries – so EU responds to calls from the United States, Brussels and London to abandon Russian energy resources.

Ursula von der Leyen, the head of the European Commission, called for a complete rejection of gas, oil and coal from Russia:

“To do this, we must diversify supply, achieve better results in energy efficiency and invest heavily in renewable energy.”

However, French President Emmanuel Macron, according to TASS, warns of big problems if gas supplies from Russia are cut off, especially for Italy and Germany:

“France is not so dependent on Russian gas. But if Russia cuts off gas supplies, Europe will face great difficulties next winter.”

German Chancellor Olaf Scholz recalled that energy supplies from Russia were removed from sanctions – there are no other ways to ensure Europe’s energy security now:

“The federal government is working with its partners in the EU and beyond to develop alternatives to Russian energy. But it doesn’t happen overnight.”

Prime Minister of the Netherlands Mark Rutte warns that at this stage it is not necessary to take measures against energy supplies from Russia, so as not to “provoke uncontrollable risks”:

“It is important not to make a mistake here. We need our companies to continue working with Russian energy.”

Kiril Petkov, Prime Minister of Bulgaria, noted as quoted by Reuters:

“We have no alternatives at the moment, we are too dependent.”

And the head of the Hungarian Finance Ministry, Mihaly Varga, once again stated that Budapest would not support the inclusion of the energy sector in EU sanctions against Russia:

“The expansion of sanctions in this area poses a serious threat to the forint” (the national currency of Hungary).

Siegfried Russwurm, president of the German Industrial Union, warned of the threat of an EU and German embargo on energy supplies from Russia. He was supported by MEP Thierry Mariani: if the EU goes even further in the sanctions policy and decides to interrupt the import of Russian gas and oil, this will turn out to be a disaster for it.

On the same day, the cost of gas in Europe crossed the threshold of 3.9 thousand dollars. Due to Russia’s ongoing war against Ukraine and the likely freezing of Russian energy imports by the West, the price of natural gas in Europe has reached new record level – 345 euros per MWh, or almost $3900 per 1000 cubic meters.

According to the AFP agency, this is 60% higher compared to the day before. In the UK, the price of the so-called therm – a unit of heat used there – has risen to 800 pence. The price of oil has also soared due to growing fears of the negative impact of the war in Ukraine on energy supplies. Russia is an important supplier of oil and gas to the European market.

Alexander Novak, Deputy Prime Minister of Russia, draws attention to the fact that the failures of Europe’s energy policy in recent years inevitably led to a rise in prices. He recalled that Russia provides 40% of Europe’s gas consumption, and Gazprom fully fulfills contractual obligations. In addition, gas supplies through the territory of Ukraine were increased to 109 million cubic meters per day.

Novak also warned that Moscow has every right to take a “mirror” decision and impose an embargo on gas pumping through Nord Stream 1 in response to unfounded accusations against Russia about the energy crisis in Europe and the imposition of a ban on Nord Stream 1. 2″.

At the same time, Gazprom allowed new records in gas prices in Europe, and Deputy Chairman of the Russian Security Council Dmitry Medvedev “congratulated” European officials in advance on the gas price of 3.5 thousand euros. The next day it turned out that the position of the United States, Britain and the Baltic States on the supply of energy resources came into sharp conflict with the point of view of the leaders of most EU countries.

Leading expert of the National Energy Security Fund (NESF), researcher at the Financial University under the Government of the Russian Federation Stanislav Mitrakhovich, reminds the publication “Sight”that the expectation of an energy embargo against Russia caused a panic in the futures market. “As a result, the price of gas has reached almost 4,000 dollars per 1,000 cubic meters, and on the spot market – more than 2,000. This is an outrageous, irrational figure for Western industry. By the way, in Russia the price of gas is about $40 per thousand cubic meters, which is 100 times cheaper than in Europe.”

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