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Gazprom, Russia’s state-controlled natural gas company, says it is unable to guarantee gas deliveries to Europe because of “extraordinary”’ circumstances, Reuters reported.
Russia closed the pipeline earlier this month for 10 days of “routine maintenance.” Deliveries are scheduled to resume this week on Thursday.
Now, in a 14 July letter to several European gas customers, Gazprom has invoked the “force majeure” clause in its sales contracts, the so-called “act of God” clause, claiming that circumstances beyond its control may cause it to break the terms of the agreement.
Reuters did not report whether the letter explained what the extraordinary circumstances are.
“This sounds like a first hint that the gas supplies via [Nord Stream 1] will possibly not resume after the 10-day maintenance has ended,” Hans van Cleef, ABN Amro’s senior energy economist, said to Reuters.
Gazprom cut the deliveries through the pipeline to 40 percent of capacity on June 14, saying it lacked a turbine being repaired by Siemens Energy in Canada. The turbine is now en route to Russia, Siemens says.
However, Germany’s economics ministry said the turbine was scheduled for use beginning in September, so its lack is not the real reason for the June cutback in gas flows.
Russia is widely suspected of starving Europe of natural gas as a political pressure tactic and as punishment for Europe’s participation in economic sanctions against Russia related to its war on Ukraine.
TREND FORECAST: If Russia refuses to resume gas deliveries to Europe, the continent will be plunged into a recession and the Western world will experience a severe energy shock. And now, with temperatures hitting new highs in the U.K. and soaring across Europe, more people are using more energy to stay cool.
The only easing of prices will occur when the world dives deep into recession and/or sanctions are lifted on Russia by Europe which relies on Russian energy supplies. According to the European Union, last year the EU imported more than 40 percent of its total gas consumption, 27 percent of oil imports and 46 percent of coal imports from Russia. Energy represented 62 percent of EU total imports from Russia, and cost €99 billion.
And while the euro is diving toward parity with the dollar and increasing the cost of imported goods, the Russian ruble is trading near seven year highs. Having just posted a record trade surplus, Russia continues delivering oil to China, India, and other nations not taking part in the sanctions.