On Friday the unthinkable happened as Gazprom ( Russian Gas Provider) shut down the single pipeline active in Nord Stream 1. Yes, it was anticipated by almost everyone but the timing surprised even the governments of Europe. It was also important as a few hours before G7 announced a plan to cap the prices of oil supplies by Russia. This is a big roadblock from current buyers like China and India. It is because most of the shipping insurance companies are of G7 country origin.
Over the weekend all hopes of the restart were struck down when Gazprom clarifies that turbine repair can only be done by Siemens and doing this required the removal of sanctions. In reply to this German government reaffirm that the actions against Russia will only increase and removal of the dependency will be quicker.
Currently, the total EU Gas storage is at 893 TWH which is similar to levels in October 2021. This would have been sufficient if the new supply was not stopped because the usage in the winter months is 20-30% more than summer period.
There are already large impacts of these actions on power companies in Europe and the United Kingdom that are earning there will be disruptions during winter. This has already led to Germany, Finland, and Sweden announcing a total package of almost $100 Bn. But printing money will not resolve the real-world issues as we have already learned from the lockdown period.
This Friday EU energy ministers are meeting to discuss various measures that include a price cap on gas supplies to electricity providers and supplies from Russia. It also includes credit lines of electricity provided and detachment of market-driven prices for power. These measures are going to create more disturbance than cause relief in both the financial and real worlds.