The European Commission is not anticipating the Nord Stream 1 pipeline to restart following the conclusion of scheduled maintenance, a move that could plunge the region’s economies into an energy crisis.
According to the Wall Street Journal which cited European Budget Commissioner Johannes Hahn, Gazprom may not turn natural gas flows back on following annual upkeep on the Nord Stream pipeline, which began on July 11 and is expected to conclude in 10 days. “We’re working on the assumption that it doesn’t return to operation,” he told reporters in Singapore this week.
The comment follows Gazprom declaring force majeure on at least one of its supply obligations earlier this week.
Prior to the conflict in Ukraine, Europe received about 40% of its natural gas from Russia, with Germany being the biggest importer of the country’s energy and natural resources. But, following a plethora of Western sanctions aimed at curbing Moscow’s military operation in Ukraine, Gazprom began reducing gas flows into the region by up to 40% of the pipeline’s capacity last month, blaming the shortage on technical issues.
Given the current state uncertainty that Gazprom may extend the closure indefinitely, the European Commission is expected to instruct the bloc’s members to start rationing natural gas in order to allow for Europe’s storage facilities to recoup shortfalls ahead of the winter months.
Information for this briefing was found via the WSJ. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.