Ukraine suspends part of pipeline operations, price explodes
- May 12, 2022
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Increase reaches 250% this Wednesday, the 11th, as war continues; countries like Germany, Finland and Hungary import more than 60% of all the gas they consume from Russia
For the first time since the beginning of the war, the Ukraine reduced by 25% the operations of the main pipeline that transports Russian natural gas to Europe. The scenario could still worsen, as Gtsou, which operates Ukraine’s gas system, has threatened to suspend activities at a point on the route through which a third of all fuel transported to the European Union passes. The company revealed that it could carry out the threat this Wednesday, the 11th.
Russian state-owned Gazprom, one of the world’s largest natural gas exporters, confirmed that it had received a notification from Ukraine about its intention to stop transporting gas to Europe via the Sokhranivka interconnector. The pipeline passes through the Luhansk region, partly under the control of Russian pro-separatist groups.
Against this backdrop, natural gas prices in Europe rose to more than 100 euros per megawatt hour on Wednesday, 250% more than a year ago.
Countries like Germany and Finland import more than 60% of all the gas they consume from Russia. Moscow’s dependence on power generation is even greater in the Czech Republic, Hungary and Slovakia, which purchase more than 85% of the gas they need from Russia.
In April, inflation in Europe hit a record after six consecutive months of highs, reaching 7.5%. Last month, the European central bank even predicted that the price increase was close to peaking, but developments in the war in Ukraine could change that scenario. In March, the rise in energy costs in Europe reached 38% compared to the same period last year.
The Italian central bank expects the European Union to enter a recession this year if all Russian gas supplies to Italy and other countries in the region are suspended.
Ukraine is pushing Europe for more resources and weapons – Germany and other European countries have already channeled more than €140 million in military and humanitarian aid to Kiev. The United States, in turn, sent about 3.8 billion dollars in armaments to Ukraine. The war reaches its third month this week.
The conflict is in danger of escalating, with Belarus’ decision to deploy troops in areas bordering Ukraine and a recent proposal by the US Congress to make a new $40 billion package in military aid available to Ukraine — just the right Senate approve the measure, which should happen until next week. At the same time, US government representatives such as Avril Haines, director of National Intelligence, have said that Vladimir Putin is preparing for a protracted war, from which the use of nuclear weapons would not be ruled out.