Photo Credit: Uniper
Russia’s continued pressure on gas supplies entering the nation will only worsen the gas situation in Europe. Prices immediately increased, and they will do so throughout the winter. Germany will suffer the harshest consequences if the trend continues, according to Uniper, a German energy behemoth.
“I have said this a number of times now over this year, and I’m also educating policymakers. Look, the worst is still to come,” stated the company’s CEO, Klaus-Dieter Maubach.
“What we see on the wholesale market is 20 times the price that we have seen two years ago — 20 times. That is why I think we need to have really an open discussion with everyone taking responsibility on how to fix that,” the company executive further said.
Uniper supplies are running low. As the largest German gas supplier, the circumstance propelled prices through the roof. The German government financed Uniper with 15 billion euros, or around $14.9 billion, to assist the corporation with its difficulties. The rescue agreement should help the corporation overcome its present challenges and stabilize its system.
The company faces yet another threat due to Russia’s decision to halt supplies from entering the Nord Stream 1. As a result, the price of Uniper’s shares dropped 3.5% on Tuesday.
The Russian government-run energy company Gazprom has already hindered gas supplies to Europe via the main pipeline. Suppliers were concerned about the plan since it would require several regions of Europe to store their supplies until the winter.
The G7 and its take on the issue
Following the G7’s decision to restrict Russian oil prices as a sign of opposition to Russia’s conflict with Ukraine, Gazprom severed ties with the nation.
“We aim to align implementation with the timeline of related measures within the EU’s sixth sanctions package. [The initial price cap would be set] at a level based on a range of technical inputs,” the seven-membered block said.
The United States, Canada, Germany, France, Italy, the United Kingdom, and Japan make up the G7. In a statement, the G7 stated:
“To deliver on this commitment, today we confirm our joint political intention to finalize and implement a comprehensive prohibition of services which enable maritime transportation of Russian-origin crude oil and petroleum products globally – the provision of such services would only be allowed if the oil and petroleum products are purchased at or below a price (“the price cap”) determined by the broad coalition of countries adhering to and implementing the price cap.
The price cap is specifically designed to reduce Russian revenues and Russia’s ability to fund its war of aggression whilst limiting the impact of Russia’s war on global energy prices, particularly for low and middle-income countries, by only permitting service providers to continue to do business related to Russian seaborne oil and petroleum products sold at or below the price cap. This measure would thus build on and amplify the reach of existing sanctions, notably the EU’s sixth package of sanctions, ensuring coherence through a strong global framework.”
Gazprom and Uniper’s tie is gone for good
Germany’s expression of dissatisfaction might make it tougher for Uniper to renew its relationship with Gazprom. Since 1970, a connection has been established between the two parties. However, the cooperation has already ended, as per the CEO of Uniper, and there are no longer any prospects for the business to make amends with the Russian supplier in the days ahead, weeks, or years. Therefore, Maubach added that Uniper must find another gas supplier to take the place of its Russian partner.
Uniper is now having trouble meeting the energy demand. One of the largest pipelines owned by Gazprom recently had to be shut down for repair on one of its compressors. As a result, the planned maintenance raised rates. Uniper is working to overcome its current problems and anticipates finding a new energy source now that they have severed its ties with Gazprom.
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