Putin rubbing hands with glee as gas cut sends EU prices soaring despite emergency plan

Germany is 'getting us all hooked on Russian gas' says expert

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In response to Russia’s brutal Ukraine invasion, the EU slapped down a number of harsh sanctions on Russia which has crippled its economy. The Russian President had already been slashing gas deliveries to the bloc in response, but his latest cut has sent ripples through global gas markets.

Prices in Europe, which soared to record highs after the war broke out, have now surged again.

It comes after Kremlin-controlled gas conglomerate Gazprom had slashed flows travelling through the Nord Stream 1 pipeline to just 20 percent of its normal capacity.

The result has been that natural European benchmark gas prices have risen by 12 percent €198 (£167) per megawatt-hour, laying bare Putin’s tight grip in the European energy market.

In fact, the EU receives around 40 percent of its gas from Russia, and Germany in particular has a huge dependence on Russian supplies.

This is why Putin sparked panic in Germany when Gazprom confirmed earlier this week that gas volumes travelling through Nord Stream 1 would dip to just 33 million cubic metres per day – a fifth of the normal capacity – from July 27.

Klaus Müller, head of the federal energy network, has said that household bills in Germany could “at least” triple as a result.

It came after the Kremlin already limited supplies flowing through the system to just 40 percent of the pipeline’s usual capacity prior to the latest supply squeeze.

Moscow has blamed the cuts on the delayed return of two gas turbines which were taken offline for repairs, with the maintenance work being carried out in Canada.

But, according to the Kremlin, “restrictions and sanctions” slapped down on Russia by both Canada and the EU were to blame for the delayed return of the equipment, and in turn for the gas cuts too.

Kremlin spokesperson Dmitry Peskov said: “Yes, indeed, there are some defects with the turbines.

“The turbine has not arrived after a major maintenance, it’s on its way. We hope that it will happen, sooner rather than later.”

He later added: “The situation is critically complicated by the restrictions and sanctions, which had been imposed against our country.”

Now, prices are rising despite a deal brokered by EU energy ministers on Tuesday.

The deal was struck amid fears that Putin could wage a political war and completely cut off gas supplies into Europe.

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EU member, in preparation for the cuts, approved an emergency plan to limit demand in a bid to help them get through a cold winter.

It involves members making a voluntary 15 percent cut in gas consumption from August to May.

But while panic erupts in Europe, Britain is feeling the knock-on effects too, despite only getting four percent of its gas from Russia.

This is because of the integrated nature of the gas market, which experts have warned could see bills reach nearly £4,000 in Britain by January.

UK prices rose seven percent today, meaning they are six times higher than they were in July 2021.

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