BRUSSELS– European leaders are growing progressively worried about the possibility of a complete shutdown of gas products from Russia, with Italy requesting a brand-new conference to discuss the matter.
Gazprom, Russia’s state-backed energy provider, has actually lowered its gas streams to Europe by about 60% over the previous couple of weeks, triggering Germany, Italy, Austria and the Netherlands to all show they might reverse to coal as soon as again.
It comes as Europe– which gets approximately 40% of its gas by means of Russian pipelines– attempts to quickly minimize its dependence on Russian hydrocarbons in action to the Kremlin’s almost four-month-long attack in Ukraine.
“Russia is lessening the supply of gas bit by bit– to some nations [by] practically 100%; to others, cutting 10, 15%,” Josep Borrel, the EU’s leading diplomat, informed CNBC Friday.
“I don’t think they are going to cut the gas overnight, especially as we are going into the summer and during the summer the gas is not a strategic weapon. But the winter could be difficult and we have to be prepared in Europe.”
When asked if he was worried that Russia might completely cut gas products, Luxembourg Prime Minister Xavier Bettel informed CNBC: “I’m fully aware that they can. They can. It’s their choice, natural choice. They can close or open.”
He worried the value of all 27 EU member mentions settling on its technique to the problem. “In Moscow one person can decided by himself to cut energy to Europe.”
Employees pass underneath pipelines causing oil tank at the main processing plant for oil and gas at the Salym Petroleum Development oil fields near the Bazhenov shale development in Salym, Russia.
Andrey Rudakov|Bloomberg|Getty Images
European Parliament President Roberta Metsola stated Thursday that the circumstance was worrying.
“We have actually had [concerns] because Day 1. At completion of the day, some nations are more reliant than others on Russian gas. Not just on the brief and medium terms, we require to discover services to that,” she stated.
Italy, on the other hand, has actually asked for a conference at the EU level next month to go over the energy and financial scenarios even more, according to 3 EU authorities who didn’t desire to be called due to the level of sensitivity of the matter.
Recession issues
Reduced gas circulations have actually deepened issues that the EU might be ready to deal with a hard financial duration. Analysts at Berenberg stated today that the most recent cuts in gas implied their brand-new base case for Europe was economic downturn.
“Hit harder than the U.S. by the energy price shock, we project the euro zone economy to enter recession before the U.S.,” experts at Berenberg stated in a note Tuesday.
EU leaders have actually up until now declined to discuss the possibility of an economic downturn or a brand-new recession, however they have actually acknowledged that next winter season will be made complex.
Speaking to CNBC Friday early morning, Swedish Prime Minister Magdalena Andersson stated she is all set for leaders to reunite next month, supplied the bloc can reveal actions to resolve the financial pressures.
“We are definitely in a difficult economic situation with the inflation and the shortages of gas and electricity,” she stated.
The European Parliament’s Metsola concurred. “The next few months will be very difficult and we are concerned that we are facing a, let’s say, costly and difficult winter from an energy perspective.”
— CNBC’s Sam Meredith added to this report
