In the deep dive with today’s arrival of autumn, the leaders of the West, as time counts down to ensure the energy efficiency this winter, following Russia’s energy loophole, which is increasingly tightening the tap on Europe’s natural gas supply.
Although sources with deep knowledge of the processes in Brussels point out that top European officials have long been working on plans for sufficiency this winter with the prospect of zero imports of Russian natural gasyesterday’s announcement, however, by Gazprom, with which it indirectly excludes Germany and France from the supply system, came to confirm the intention of the Russian President, Vladimir Putin to pressure the European governments to the end, in order to “capitulate” to the conditions of the Russian energy giant.
Citing “”necessary work”” at a compression station on the pipeline linking gas fields in Siberia to northern Germany, the Gazprom cut the supply until 3 am on Saturday (Greece time), further intensifying the pressure on Berlin and Paris. Almost reflexively, the German Chancellor, Olaf Solz announced yesterday a new – third in a row – support package for households and businesses in his country, which he described as “huge, precise and targeted”, while Paris refused to comment on the interruption of the flow of natural gas from the pipeline Nord Stream 1with the French Minister of Energy, Agnes Panier-Rinachet simply clarifying that “France has been preparing for this scenario since the spring”.
Given the situation, the EU appears to be showing strong reflexes on the issue of capping natural gas, as the de-escalation in its price over the last twenty-four hours is a product of rather transient enthusiasm due to the increase in storage flows in Europe, rather than an open horizon trend in future. On the contrary, the “war” condition in view of this winter is the reason for the extraordinary Summit of EU Ministers in September 9so most member states are expected to position themselves both with regard to the energy saving and storage measures they have taken, as well as with the formula followed in terms of imposing a ceiling on the price of natural gas, in order to put an end to the megawatt hour’s wild run .
Although the conditions, at least from the German side, are now more ripe for the introduction of a cap on natural gas prices, under discussion between Ministers of Energy of the 27 states -members is its final form and together with its scope, in order to ensure the satisfactory application of pressure by the EU towards the Russian President, Vladimir Putin.
After all, the Greek Prime Minister has submitted a related proposal since last March, Kyriakos Mitsotakis with a letter to the President of the Commission, Ursula von der Leyen, requesting the imposition of an upper limit on the TTF price of natural gas, in order to immediately limit the effects on the prices of the wholesale electricity market, in the 27 member states. At the same time, the Minister of Energy, Kostas Skrekas yesterday sent a letter to his counterparts, presenting:
· The Greek mechanism for the recovery of excess revenues from electricity production companies.
· The money recovered in the first 55 days of the implementation of the mechanism.
· The Greek proposal for a permanent European mechanism that decouples natural gas prices from electricity prices.
“Greece is playing a decisive role with specific proposals for a common European response to the international energy crisis” commented Mr. Skrekas, who is expected to participate in the crucial meeting of EU Energy Ministers on September 9.
As an alternative proposal on the table of the EU Energy Ministers, the “Iberian” proposal remains, i.e. the imposition of an upper limit on natural gas which is directed to electricity generation, i.e. generalizing the exception achieved in this direction by Spain and Portugal in Summit meeting of last March, due to their high rate of electricity generation from renewable energy sources.
In any case, with the negotiations predicted to be intensive, it is not excluded that a combination of the above two proposals will emerge as a “third way”, in order to provide a safety net for the formation of the price of natural gas at lower levels in the future, but also substantial brake on sky-high profits of providers pan-European.
In any case, the separation of energy prices from the cost of natural gas is estimated to offer many and critical breaths to the Old Continent, but above all it will send a warning message to the Moscowwhich has managed to squeeze supply, raising prices.
The successful “recipe” of the Russian President, Vladimir Putin, is at the same time stressing the 7 strongest economies in the world, with their Finance Ministers’ Meeting taking place tomorrow, Friday, with the main objective of limiting the price of Russian oil, with condition for the commitment of all participants in the scheme for its immediate implementation.
The fervor with which the G-7 is dealing with the issue of imposing a ceiling on the price of oil is explained by their concern that the Russian President may change course, but not tactics. That is, if he tries to compress his offer as well oilconsequently shooting up prices, as in the case of natural gas.
With that in mind, the Finance Ministers of the seven most powerful nations will meet tomorrow, all the while working on a plan to cap oil so that it doesn’t follow the wild gas price race, allowing more consumers to obtain relatively cheap access to heating during this winter.
However, capping oil is far from obvious, as it requires ensuring that enough stock is available on world markets, which in turn should be kept at low prices, without skyrocketing due to shortages, as has been the case in the case of natural gas. The search for the golden ratio is made even more imperative by the fact that natural gas together with oil constitute the 50% of Russia’s budgetat a time when Moscow’s revenues have been multiplied by the limitation of available natural gas reserves from the West.
With the aim of securing sufficient quantities of oil, but also the drop in its price at the same time, as the prevailing scenario he imagined, according to the Wall Street Journal, for G-7 countries the ban on financing and insuring Russian oil unless it is sold below a set price. Although ambitious, any plan to impose a cap on oil would have to be approved and implemented immediately and in any case before December 5, when the new EU sanctions package against Russia comes into force, which includes countermeasures for Russian oil with the signatures of the 27 member states.
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