EU energy prices soar as Russia vows not to resume gas supplies until sanctions lifted

Russia will not resume its gas supplies to Europe until the West lifts its sanctions, reports the Guardian.

Dmitry Peskov, Moscow’s spokesperson, blamed sanctions “introduced against our country by western countries including Germany and the UK” for Russia’s failure to deliver gas to Europe.

European gas prices increased by as much as 30% following Russia’s announcement. The European Union (EU) is now weighing new gas benchmarks and price caps to address the soaring prices.

Russian energy supplier Gazprom announced that a suspension of gas supplies to Europe would be extended indefinitely, citing “malfunctions” on a turbine along the major Nord Stream 1 pipeline, reports the Guardian. Gazprom has blamed sanctions for delaying its ability to repair the turbine.

Germany’s energy regulator said that “the defects alleged by the Russian side are not a technical reason for the cessation of operations.” Germany, which had been planning to bolster its natural gas reserves in an effort to maintain sufficient power and ease energy inflation, is now unlikely to meet its targets.

Nord Stream 1 is the single biggest gas pipeline between Russia and Europe and has historically supplied about a third of the gas Russia exported to Europe; its supply is considered crucial to improving the European energy crisis.

"Supply is hard to come by, and it becomes harder and harder to replace every bit of gas that doesn't come from Russia," said Jacob Mandel, senior associate for commodities at Aurora Energy Research. Norway, a major European gas producer, has been increasing its output to European markets in response.

France has been hit particularly hard by the energy crisis. The government has spent over $26 billion since Russia’s invasion of Ukraine to reduce French citizens’ gas and electric bills. Companies in France will soon be required to cut their energy use “by 10 percent or face enforced rationing of electricity and gas,” reports the New York Times. Businesses will also have to appoint an “ambassador of energy sobriety” and send the government their plans for cutting electricity use.

The euro slid to its lowest level in 20 years, while stock fell in Germany, Italy, France, and other markets, according to the Wall Street Journal.