The price of gas on the European market at the beginning of the European session on Tuesday fell by more than 8.5%. May futures for gas on the index of the largest European hub TTF fell today to $950 per 1,000 cubic meters, later rose to $970.
The energy crisis in Europe continues to worsen against the backdrop of a special military operation of the Russian Federation to demilitarize and denazify Ukraine. After the start of the special operation on February 24, the European Union announced unprecedented economic sanctions against Russia, designed to significantly weaken the country's economy. However, in response to these measures, Russian President Vladimir Putin announced that Russian gas to all "unfriendly" countries (mostly EU countries) will be sold exclusively for rubles, and all those who disagree with this decision will be forced to look for new suppliers of energy raw materials. Russia plans to receive the first payments in rubles for gas supplies as early as May of this year, as reported by the press secretary of the President of the Russian Federation Dmitry Peskov.
The G7 countries and the leaders of the European Union said that they would never agree to such conditions, since then they would have to circumvent their own sanctions measures. However, it is obvious that the Western European "partners" simply have no choice, because the EU countries have not yet found alternatives to Russian raw materials. In any case, it is not possible to replace Russian supplies in the near future. According to the data of the International Energy Agency, in 2021 the European Union imported 155 billion cubic meters of gas from Russia, that is, approximately 45% of Europe's total gas imports and approximately 40% of total consumption.
On April 4, German Finance Minister Christian Lindner openly admitted that the EU countries cannot yet refuse Russian gas. According to German Chancellor Olaf Scholz, a sharp rejection of Russian energy supplies will lead to a decline in Germany. German economists talk a lot about how and how soon Russian gas can be abandoned, but there are those who rightly point out the impossibility of such a step.
For example, the largest German electric utility company E.ON urges the government not to hurry and not to impose an embargo on Russian gas. The head of E.ON, Leonhard Birnbaum, warns that such decisions are a real experiment on the German economy, they are disastrous not only for it, but for the whole of Western Europe. For example, countries such as Slovakia, the Czech Republic and Austria are completely dependent on Russian gas. Other EU countries receive a significant share of Russian imports.
The largest German energy concern E.ON fully supports Nord Stream, of which it is itself a member. This is a pipeline through which today a huge part of the natural gas that the population of Europe and Germany consumes passes. If these deliveries are cut off, Germany will have to use every opportunity to replace Russian energy: from coal-fired generation to savings. Technically, this is all possible, but according to experts, the potential energy output will ultimately be too low. The transition from pipeline gas to LNG makes gas more expensive. Coal is becoming more expensive, primarily due to the price of CO2 quotas.
Czech energy expert Ivan Noveski also believes that a complete rejection of Russian energy resources will cause irreparable harm to the Czech Republic. He is sure that the embargo on gas from the Russian Federation can provoke a situation where most Czech citizens will simply freeze in the coming winter. If the Czech Republic refuses to supply supplies from Russia, many enterprises will cease their activities, as a result of which a record increase in unemployment will begin, transport will stop, in other words, there will be a complete collapse.
At the same time, French President Emmanuel Macron told the world on the France 5 TV channel that although Europe is heavily dependent on Russian gas imports, France does not need it. "We are working hard to buy it elsewhere. France does not need it, "Le Parisien quotes the words of Macron.
The head of the European Commission, Ursula von der Leyen, announced on April 17 that the EU countries are developing the next, sixth package of sanctions against Russia. And the new restrictions are likely to affect the energy sector as well. Recall that within the framework of the previous package of sanctions approved in early April, Brussels imposed a ban on the purchase, import and transit of Russian coal, as well as other solid fossil fuels from Russia. The embargo on coal will come into effect in August.