As long as Russia keeps pushing down on gas supplies coming into the nation, the gas issue in Europe will only get worse. Prices increased as a result, and they will do so for the remainder of the winter. According to German energy firm Uniper, the nation will suffer the most if the trend continues.
“I have said this a number of times now over this year, and I’m also educating policymakers. Look, the worst is still to come,” stated Uniper’s CEO, Klaus-Dieter Maubach.
“What we see on the wholesale market is 20 times the price that we have seen two years ago — 20 times. That is why I think we need to have really an open discussion with everyone taking responsibility on how to fix that,” the company executive said further.
A shortage of Uniper exists. The situation has put prices over the roof as the primary gas provider in Germany. The German government gave Uniper a subsidy of 15 billion euros, or around $14.9 billion, to aid the firm with its issue. The rescue agreement should help the corporation overcome its current difficulties and stabilize its system.
Another danger to the business is Russia’s decision to halt supply from entering Nord Stream 1. As a result, shares of Uniper fell by 3.5% on Tuesday.
The primary pipeline used to transport gas from Russia to Europe is already being blocked by the energy giant Gazprom, which the Russian government owns. Suppliers voiced concerns over the action, which would require several parts of Europe to store their stock until the winter.
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Involvement of G7 in the issue
The G7 decided to restrict Russian oil prices as a gesture of protest against Russia’s war on Ukraine, and soon after that, Gazprom severed ties with the nation.
“We aim to align implementation with the timeline of related measures within the EU’s sixth sanctions package. [The initial price cap would be set] at a level based on a range of technical inputs,” the seven-membered block stated.
The US, Canada, Germany, France, Italy, the UK, and Japan are members of the G7. In a manifesto, the G7 stated:
“To deliver on this commitment, today we confirm our joint political intention to finalize and implement a comprehensive prohibition of services which enable maritime transportation of Russian-origin crude oil and petroleum products globally – the provision of such services would only be allowed if the oil and petroleum products are purchased at or below a price (“the price cap”) determined by the broad coalition of countries adhering to and implementing the price cap.
The price cap is specifically designed to reduce Russian revenues and Russia’s ability to fund its war of aggression while limiting the impact of Russia’s war on global energy prices, particularly for low and middle-income countries, by only permitting service providers to continue to do business related to Russian seaborne oil and petroleum products sold at or below the price cap. This measure would thus build on and amplify the reach of existing sanctions, notably the EU’s sixth package of sanctions, ensuring coherence through a strong global framework.”
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The connection between Gazprom and Uniper
It could be challenging for Uniper to resume its relationship with Gazprom in light of the statement of disapproval that Germany signed. Since 1970, a relationship between the two parties has existed. The cooperation, according to the CEO of Uniper, has already ended, and the business no longer intends to make amends with the Russian supplier, not in the next days, weeks, or months. Maubach added that it is urgent that Uniper replace its Russian partner and find a new gas supplier.
At the moment, Uniper is having trouble meeting the demand for energy. One of Gazprom’s largest pipelines was recently shut down because one of its compressors required maintenance. Consequently, the planned maintenance raised costs. Uniper is presently mustering the will to deal with its immediate problems and anticipates finding a new energy source now that they have severed connections with Gazprom.