The Nord Stream 1 pipeline, which carries gas from Russia to Germany, is undergoing scheduled maintenance from Monday, threatening to cut off gas supplies to Europe and raising concerns regarding a prolonged supply disruption, according to Archyde.com.
Russia had already reduced the capacity of the pipeline to 40 percent, which contributed to raising European and British gas prices, and standard contracts are trading by more than 350 percent to 400 percent compared to the same time last year.
Here are some factors that explain the impact of Russian supplies on European gas markets, including those that are not directly dependent on Russian gas:
How much gas does Russia supply?
Europe has historically relied on Russia for regarding 40 percent of its natural gas, most of which is delivered via pipelines including the Yamal pipeline, which crosses Belarus and Poland to Germany and Nord Stream 1, which runs directly to Germany, as well as pipelines. through Ukraine.
A network of interconnected pipelines connects the internal gas markets in Europe.
Not all countries get gas directly from Russia, but if countries like Germany, the largest buyer of Russian gas in Europe, get less, they must fill the gap from other places, for example from Norway, which has an indirect effect on the available gas in other countries.
As a result, changes in Russian supplies can cause gas prices to fluctuate in Britain like the rest of Europe, even though Britain typically gets less than 4 percent of its gas from Russia. Its Norway.
What is happening now?
The flow of Russian gas to Europe declined in the first half of 2022, with flows through the three main pipelines dropping by regarding 50 percent compared to the first half of 2021.
The flow through Yamal, which has historically transported gas from Russia to Europe, has shifted east to Poland from Germany since the beginning of the year.
Flow through Nord Stream 1 and through Ukraine, which had already been halted last year, began declining in March following the Russian invasion of Ukraine.
This year, Moscow reduced gas flows to Bulgaria, Finland, Poland, Danish supplier Orsted ORSTED.CO and Dutch company Gasterra and Shell because of their German contracts, following they all rejected the Kremlin’s request to switch to paying for energy purchases in rubles.
Several companies such as Germany’s Uniper UN01.DE and RWE RWEG.DE and Italy’s Eni ENI.MI made payments under the new scheme to Russia and continued to receive gas.
But several companies, including Uniper and RWE, have since seen their supplies fall back following Russia reduced the capacity of the Nord Stream 1 pipeline.
Italian Prime Minister Mario Draghi accused Moscow of using its gas supplies for political reasons, and Russia said supply cuts were necessary due to delays in returning equipment sent for repair.
German Economy Minister Robert Habeck said Moscow may continue to suspend gas flows through the pipeline beyond the end of a planned maintenance period in an attempt to destabilize Europe.
The supply cut via Nord Stream 1 has pushed up European and British gas prices, which analysts said might rise further if normal flow is not restored following maintenance, which is due to expire on July 21.
What regarding alternatives?
The European Union aims to end dependence on Russian fossil fuels by 2027 and has begun looking at alternatives, such as increasing global liquefied natural gas (LNG) imports.
While Washington resorted to asking for help from some Gulf countries, including Qatar, to help fill the European shortage gap.
