Alok Sharma: North sea gas extraction won't solve energy crisis

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

The move comes as international sanctions have started to take effect on the Russian economy, leaving Putin using the resource as leverage. The news will now see European nations forced to choose between sustaining the Russian currency or losing vital gas supplies during the height of an already delicate energy crisis.

Adding to the crisis, Putin claimed such transactions would only apply to “unfriendly” countries.

Speaking of the Russian commitment to supply Europe with gas, he stated obligations would be met during a state TV appearance.

Putin said: “Russia will continue, of course, to supply natural gas in accordance with volumes and prices, fixed in previously concluded contracts.

“The changes will only affect the currency of payment, which will be changed to Russian roubles.”

Putin ordered central bankers to develop a mechanism allowing Western countries to pay in the Russian currency rather than euros or US dollars.

Following the announcement, wholesale gas prices in the UK jumped, with the British price for day-ahead delivery surging by 18 percent to 259.50 pence per therm by 13:54 GM, while the winter 2022 price increased 11 percent to 264.01 p/therm.

The rouble also briefly leapt to a three-week high past 95 against the US dollar in Moscow, before settling close to 100.

Currently, around 40 percent of European gas is sourced from Russia.

Although punitive measures have been applied to a host of Russian entities and individuals, many officials are hesitant in sanctioning Russian energy through fears of shortages.

Italy, the continent’s biggest importer of Russian gas after Germany, signalled it would be unwilling to acquiesce to the Kremlin demands.

Francesco Giavazzi, an economic adviser to Italian prime minister Mario Draghi, said: “My view is we pay in euros because paying in roubles would be a way to avoid sanctions, so I think we keep paying in euros.”

Germany may struggle to take a similar approach.

Chancellor Olaf Scholz warned on Wednesday being unable to import Russian gas would put “hundreds of thousands of jobs at risk, and entire industries would be on the brink”.

DON’T MISS:
EU state set to brand letter Z as Nazi symbol [REVEAL]
Putin humiliated as another commander killed in Ukraine [INSIGHT]
NATO to bolster the Eastern flank in warning to Putin [REPORT]

The EU superpower has already seen its industry output plummet in recent months, and as a cause, has seen inflation surge to record highs.

Mr Scholz said: “We will end this dependence on Russian oil, coal and gas as quickly as we can, but to do that from one day to the next would mean plunging our country and all of Europe into a recession.”

Berlin said Russia’s demands constitute a breach of contract, while Vienna and Rome both said they would continue paying for Russian gas in euros, citing Moscow’s attempt to skirt the impact of sanctions.

Germany’s Economy Minister Robert Habeck said: “The announcement of paying in roubles is a breach of the contract and we will now discuss with our European partners how we would react to that.”

Is Putin finding new ways to exert pressure on the West? Should Europe still buy Russian gas in light of the ongoing energy crisis? Are you willing to pay more for non-Russian gas? Let us know what you think by CLICKING HERE and joining the debate in our comments section below – Every Voice Matters!

The EU’s dependence on Russian gas shows no sign of slowing despite the conflict in Ukraine. In the first half of March, Gazprom exported an average of 500m cubic metres a day to countries outside the former Soviet bloc such as EU nations, China and Turkey.

Europe averaged 384 million cubic metres a day, Gazprom data showed.

Other nations including Iran, Qatar and the USA have offered to supply natural gas to Europe as the crisis unfolds.

However, due to logistical and infrastructural hurdles, the amount of gas supplied will fail to meet current supplies piped in from Russia.

Source: Read Full Article