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Russia shuts off natural gas to Europe

Posted August. 24, 2022 07:47,   

Updated August. 24, 2022 07:47


Last month, Russia temporarily shut down the Nord Stream 1 pipeline that flows to Europe via Germany after getting slapped with the Western sanctions from Ukrainian invasions, and since the operation resumed, Russia’s gas supply for Europe has halved. And fear over energy shutdown is growing as Russia’s state-run energy mogul Gazprom announced its plan to halt gas supplies to Europe for three days at the end of the month, citing abrupt maintenance.

Hit by the extreme draught, the operation rate of factories has fallen owing to lack of industrial water. The traffic of vessels carrying raw materials also fell by 25 percent from the previous levels. In Germany, experts are expressing grave concerns that the gas crisis will eventually trigger the worst economic woes since the global financial crisis in 2008 by fueling inflation and dampening economic activities.

The Dutch TTF gas futures, which is considered as a benchmark for Europe-wide natural gas prices, soared to 276.76 euros per MWh, jumping 1,000 percent year-on-year. Steel companies in France and the UK are considering shutdown for fear of surging power prices.

The rising energy bills are dealing a hard blow to South Korea, the fifth largest energy importer in the world. “South Korea, a country with a high dependency on energy imports, must find a way to reduce dependency on certain exporters and make use of new types of renewable energies to strengthen its energy security,” Executive Director of the International Energy Agency (IAE) Fatih Birol said in an email interview with The Dong-A Ilbo.

Eun-A Cho achim@donga.com