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Rapidly dwindling gas reserves and expected Russian supply cuts are setting the stage for a new energy crisis in Europe, Bloomberg reports. According to the report, the escalation of tensions in Ukraine this year has led to a rise in gas prices of around 45%.
Bloomberg further clarifies that while the rate of increase in gas prices is well below that seen in 2022, it is still high enough to threaten to worsen the inflation crisis and increase pressure on manufacturing.
The EU needs to ensure that it has large gas reserves by the end of the winter in case Russian gas transit through Ukraine stops on 1 January 2025 due to the expiry of the agreement between Moscow and Kiev. Bloomberg notes that the hardest hit could be Germany, whose economy continues to stagnate, as it did in 2022.
On 16 November, Austrian energy company OMV stated that Gazprom Export had stopped supplying gas from Russia. The contract between OMV and Gazprom for gas supplies to Austria was set to run until 2040.