Sunday, February 5

Russia is orchestrating the gas crisis in Europe, says the head of the energy agency | Energetic industry

The head of the International Energy Agency accused Russia of orchestrating the deepening of Europe’s energy crisis at a time of heightened geopolitical tensions by withholding up to a third of its gas exports.

Fatih Birol, executive director of the IEA, directly blamed Russia’s behavior for record energy market prices in Europe this winter that threaten to disrupt much of the European economy and plunge millions into a cost of living crisis.

He said historic low gas storage levels across Europe were largely due to Russia’s state gas company Gazprom, which shipped around 25% less gas than usual to Europe in recent months despite of an increase in demand after the economic recession of 2020.

“We believe that there are strong elements of tightness in the European gas market due to the behavior of Russia,” Birol told reporters on Wednesday. “I would like to point out that today’s low Russian gas flows to Europe coincide with increased geopolitical tensions over Ukraine.”

The IEA’s most damning criticism of Russia’s energy policy to date came after the Kremlin downplayed hopes for diplomatic solutions to the current Ukraine crisis on Tuesday, ahead of a meeting in Brussels between Russia and the 30s. NATO member states.

This week, Russian forces deployed along the border with Ukraine conducted a live-fire military exercise involving 3,000 soldiers and tanks, in clear rejection of US demands for a de-escalation in the region.

At the same time, the world’s largest gas supplier has chosen to control gas exports to Europe, where market prices have surpassed all-time highs set in September to hit a new record last month.

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Analysts estimate that gas prices in Europe could fall by half if Russia agrees to increase its exports by 20%. Gazprom has stated that it is complying with all its contracted exports to European companies.

“The current storage shortfall in the European Union is largely due to Gazprom,” Birol said. “Low levels of storage at the company’s facilities in the EU account for half of the EU storage deficit, although Gazprom’s facilities only make up 10% of total EU storage capacity.”

Chris O’Shea, director of the UK’s largest home energy provider British Gas, warned that prices are likely to remain high for at least another two years, based on current outlook for global energy markets and the continued UK dependence on fossil fuels. .

“There is no reason to think that energy prices will go down anytime soon; the market suggests that high prices will be here for the next 18 months to two years, “he told the BBC on Wednesday morning.

“As we move towards net zero, gas is a great transitional fuel, so as you shut down coal-fired power plants in other countries, there is more demand for gas, but there is not an abundance of gas that just can turn on quickly. “

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The prediction could prove devastating for UK households, facing a cost of living crisis after a record spike in energy bills this winter due to the global gas crisis. The rising cost of fossil fuels has also led to record prices at gas stations and may fuel rising inflation throughout the economy in the coming months.

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O’Shea said it was “inconceivable” that the government and energy providers failed to take action to protect homes from soaring energy bills, which could average £ 2,000 in April.

He repeated industry calls for the government to remove the 5% VAT rate on energy bills, shift green levies to general taxes, and defer charges taken through energy bills to cover the cost of a series of recent supplier collapses.

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