Germany on Thursday activated the “alarm phase,” phase two of the country’s three emergency plans for methane-based gas plans, after Russia’s Gazprom throttled deliveries by 60%. Phase three would allow the government to implement energy rationing. German Economy Minister Robert Habeck told reporters the austerity measures were a direct political attack in retaliation for Germany’s sanctions against Russia and military aid to Ukraine.
“Even if you don’t feel it yet, we are in a gas crisis,” he said. “Winter will eat.” In response to the news, European gas prices rose again. Habeck warned that this could have a “Lehman Brothers effect”, explaining “[t]The whole market is in danger of collapsing at some point.”
The ripple effects of limited gas supplies and skyrocketing European gas prices, exacerbated by the explosion at the Freeport LNG plant in Texas earlier this month, are becoming more severe around the world. Pakistan faces blackouts as unaffordable gas prices have forced the country to refuse purchases three times in June as it progresses into its hottest months. Down under, the Australian gas market is in disarray as suppliers rush to source gas to meet winter demand. Amid all this, China is increasing its purchase of methane gas from Russia, bringing the two countries’ fortunes closer together.
Sources: German Emergency Plan: Reuters, New York Times $, Wall Street Journal $, Reuters Factbox; Lehman Brothers: Fortune; Euro ripple effects: Bloomberg $, Reuters, Bloomberg $, Reuters; Freeport Explosion: Reuters; Pakistan: Bloomberg$; Australia: Reuters; China: Wall Street Journal $
Republished from Nexus Media.
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