Natural Gas: Russia halves shipments to Europe. It will be a shock
Natural gas prices in Europe hit a new record, initially slowing, then a much faster tightening of Russian supply looks set to cause a storage crisis on the continent.
As Bloomberg notes, Russian gas flows through the Yamal-Europe pipeline that crosses Belarus and Poland to Mallnow, Germany…
… Fell suddenly over the weekend, leaving Europe with the problem of replenishing its winter stocks. As the graph below shows, the amount of gas entering Germany from the Mallnow compression station has decreased by almost half, an important signal for all of Central Western Europe.
As Bloomberg notes, the extraordinary global natural gas supply crisis has fueled global price increases, causing prices to fly, from Europe to China to the US, as we can see in North American future prices.
Why is there this decline in Russian supplies? Simple: the German-led EU has supplied Russia with a loaded pistol and it is starting to take advantage of it. Russian gas passes through Nordstream 1, parallel to Nordstream 2, and through the gas pipeline passing through Ukraine. Gazprom Export is not making reservations for Ukrainian transport capacities at a level close to which 2018 flows could be achieved and has allowed European stocks to sink to lows and prices to highs.
European storage is unlikely to be adequate for the winter, making Nord Stream 2's opening and use essential for price stability in Europe.
European supplies have fallen by 26.5 billion cubic meters in the two years of storage since April 2019. If nothing changes, as Gazprom Expor recently stated, there will be another 20 Bcm that may not be available for European storage. Not to mention that, at this point, any European pressure towards Russia of a political nature is literally canceled.
After all, the Green Deal forced the Dutch Shell to stop investing in the exploitation of the North Sea. Fortunately, both Norway and the United Kingdom have not followed this same path and are continuing to invest in new fields. In the meantime, however, the Norwegian production has dropped, due to the maintenance difficulties for the covid-19, but the Algerian one has remained high, but lately has problems. So all the factors are coming together to put the EU in Russia's hands, but the German and Brussels leaders have a heavy responsibility in this matter.
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The article Natural Gas: Russia halves shipments to Europe. It will be a shock comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/gas-naturale-la-russia-dimezza-gli-invii-in-europa-sara-uno-shock/ on Wed, 04 Aug 2021 17:11:54 +0000.