On November 23, Bloomberg reported that Europe is on the brink of a new energy crisis, as rapidly depleting gas reserves and the possibility of supply cuts from Russia exacerbate an already difficult situation.
In the article, Bloomberg analyzed the situation in Europe after US sanctions against Gazprombank, Russia's main bank handling energy-related transactions.
The European market is still recovering from severe energy shocks that occurred two years ago, with the Russia-Ukraine conflict contributing to a 45% increase in gas prices this year, according to Bloomberg.
While current prices are still below the 2022 record, they are seen as high enough to exacerbate the cost of living crisis for households and increase pressure on producers.
Bloomberg quoted Dr. Markus Krebber, CEO of RWE AG, highlighting the concerns: "We still have problems with gas supplies. If we really want to be independent of Russian gas, we need more import capacity."
Mr Krebber warned that this winter could see significant challenges as gas storage facilities are rapidly depleting.
Gas reserves are important during the coldest months; however, reserves are falling rapidly due to increased heating demand amid low temperatures and a lack of wind for power generation.
Despite plans to wean itself off Russian energy, the EU remains one of the world's largest importers of Russian fossil fuels.
Last week, the US sanctioned Gazprombank, Russia's main bank handling energy-related transactions and the country's last major bank connected to the international interbank payment system SWIFT.
Losing one of Russia’s last remaining gas pipelines would significantly increase market pressure and push global prices higher, analysts at Energy Aspects told Bloomberg.
Hungary, which opposes harsh sanctions imposed on Russia over the conflict in Ukraine, said that by sanctioning Gazprombank, Washington is deliberately endangering the security of energy supplies of a number of European countries.
Bloomberg said summer gas prices — typically expected to be low enough to replenish storage — are now higher than expected prices for the coming winter.
This suggests that energy costs are likely to remain high for a long time, and as storage levels decline this winter, replenishing reserves will become increasingly difficult, Bloomberg noted.
