Russia is using gas as ‘weapon of war,’ says French ecology minister

Russia is utilizing vitality provides as a “weapon of battle”, France mentioned on Tuesday after Russia’s Gazprom reduce deliveries to a significant buyer within the nation whereas additionally planning to close its principal fuel pipeline to Germany for 3 days this week.

Western nations worry that Moscow is intentionally driving up fuel costs to attempt to weaken their opposition to its invasion of Ukraine, a tactic Ukrainian President Volodymyr Zelenskyy on Monday dubbed “financial terrorism”. 

“Very clearly Russia is utilizing fuel as a weapon of battle and we should put together for the worst case state of affairs of a whole interruption of provides,” France’s Power Transition Minister Agnes Pannier-Runacher mentioned.

She was talking to France Inter radio after French utility Engie mentioned it might obtain much less fuel from Gazprom from Tuesday due to an unspecified contractual dispute.

By Tuesday night, the Russian fuel big introduced that it’ll droop its fuel deliveries to Engie from Thursday as a result of French firm’s failure to pay for all deliveries made in July.

“Gazprom Export has notified Engie of a full suspension of fuel deliveries from 1 September, 2022 till the receipt in filled with the monetary sums due for the deliveries,” the Russian group mentioned in an announcement printed Tuesday night on its Telegram account.

Moscow has insisted that European nations ought to pay for Russian fuel in roubles — a method to hold its foreign money afloat amid extreme Western sanctions on account of its aggression in opposition to Ukraine.

Nord Stream 1, the principle conduit for Russian fuel into Europe, has develop into a flash level within the dispute. Europe faces an extra squeeze on provides this week as Gazprom shuts off the pipeline for upkeep from Wednesday until the early hours of Saturday.

Russia has been pumping fuel through Nord Stream 1 at solely 20% of capability and there are fears that this week’s outage might be prolonged.

Kremlin spokesman Dmitry Peskov mentioned on Tuesday that technological issues brought on by Western sanctions on Russia are the one factor standing in the way in which of supplying fuel through Nord Stream 1.

European governments are attempting to coordinate a response to hovering vitality prices for companies and households and to fill storage amenities forward of peak demand within the winter.

‘Costs are insane’

EU vitality ministers will maintain an emergency assembly on 9 September to debate the disaster.

Germany, Europe’s largest financial system, is open to discussing a price-cap scheme on fuel provides at a European stage, a supply in Italy advised Reuters, citing a textual content message Germany’s financial system minister despatched to his colleagues throughout the bloc.

The supply mentioned Robert Habeck despatched a message to EU vitality ministers flagging that Berlin was open to debate the value cap at subsequent week’s assembly.

Italian Prime Minister Mario Draghi has been pushing for a value cap and has additionally known as for steps to decouple the price of electrical energy from the fuel value. Such a transfer would enable European households to get the advantages from electrical energy produced from cheaper sources comparable to renewables.

The chief govt of German vitality agency Wintershall Dea mentioned on Tuesday that present value ranges meant demand for fuel would fall in the long run.

“The costs we’re having at present are insane. That’s nothing even a fuel producer is searching for as a result of ultimately, we’re going to massively destroy demand for our product,” Mario Mehren advised reporters on the sidelines of a convention in Norway.

Benchmark Dutch wholesale fuel costs rose on Tuesday afternoon after an preliminary retreat. The front-month fuel contract was up 1.5% at €271/MWh, off all-time highs hit final week however nonetheless buying and selling at ranges greater than 5 instances these seen a yr in the past.