On November 23, Bloomberg reported that Europe is on the brink of a new energy crisis, as rapidly depleted gas reserves and the possibility of supply cuts from Russia have exacerbated the already difficult situation.
In the article, Bloomberg analyzed the situation in Europe after US sanctions on Gazprombank, Russia's main bank that handles energy-related transactions.
According to Bloomberg, the European market is still recovering from serious energy shocks that occurred two years ago, with the Russia-Ukraine conflict contributing to a 45% increase in gas prices this year.
Although current prices are still below the 2022 record, they are said to be high enough to exacerbate the cost of living crisis for households and increase pressure on manufacturers.
Bloomberg quoted Dr. Markus Krebber, CEO of RWE AG, as highlighting the concerns: "We still have problems with gas supply. 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 depleted.
Gas reserves play an important role during the coldest months; however, reserves are rapidly decreasing due to increased heating demand in the context of low temperatures and a lack of wind to generate electricity.
Despite plans to wean itself off Russian energy, the EU remains one of the world's biggest importers of Russian fossil fuels.
Last week, the US sanctioned Gazprombank, Russia's main bank that handles energy-related transactions and is the country's last major bank connected to the international interbank payment system SWIFT.
Analysts at Energy Aspects told Bloomberg that losing one of Russia's last remaining gas pipeline routes would significantly increase market pressure and push global prices higher.
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 to several European countries.
Bloomberg said gas prices in the summer - often expected to be low enough to replenish reserves - are now higher than expected for the upcoming winter.
This, Bloomberg notes, shows that energy costs are likely to remain high for a long time and as reserves fall this winter, replenishing reserves will become increasingly difficult.
