Little Miss Uncertain About Gas Supply

Following a 10-day pause due to planned maintenance, natural gas resumed flowing from Russia to Europe at normal levels via Germany’s Nord Stream pipeline yesterday. *Cue the EU’s collective sigh of relief.*

✋ Yes, but… Uncertainty about supply still remains. Russian President Vladimir Putin said earlier this week that the volume of gas sent via Nord Stream will be cut in half soon, due to maintenance requiring a pipeline part currently delayed by Ukraine-related sanctions.

• German authorities responded by saying their energy dependence on Moscow “is being used as a weapon,” accusing Putin of keeping Europe in a constant state of uncertainty as leverage in its conflict against Ukraine.
• On Wednesday, the EU proposed a 15% cut in natural gas use by each of its member states from August until March in case Russia halts its exports.

⚡️📸 The big picture: Germany – and the EU, more broadly – have been dependent on Russian fossil fuels for years. Both sourced ~40% of their energy from Moscow in 2021. But shortly after Ukraine was invaded, the 27-member bloc implemented a plan to phase out most Russian imports by the end of this year and began ongoing efforts to source energy from elsewhere.

• Since March, the EU has negotiated new gas deals with the US and Azerbaijan, and held additional talks with Israel and Qatar.

+Elsewhere: Japan recently announced plans to restart nine of the country’s nuclear reactors this winter, enough to cover 10% of its energy needs (roughly the same share that was supplied by Russia in 2021).