Gas rationing now a real prospect for the European Union – Economic Times

Throughout the entire Cold War and in the decades since, Russia was a stable supplier of gas to Europe. That changed this week.

Russia slashed gas supplies in apparent retaliation over Europe's support for Kyiv. After its biggest moves yet to use energy as a weapon, gas rationing in the region is now a very real prospect. The squeeze caused prices to surge, added pressure to the region's economy and could strain European solidarity - all victories for the Kremlin that came as European leaders underlined support for Ukraine during a high-profile trip to the country.

With European utilities forced to tap reserves intended to cover needs for the winter, government controls of gas distribution could start within months. If Russia completely shuts its main link, the region could run out of supplies by January, according consultant Wood Mackenzie Ltd.

The heightened alarm was triggered after the Kremlin cut flows by about 60% through the Nord Stream pipeline, which pumps gas straight to Germany. The diminished deliveries had a knock-on effect for France, Austria and the Czech Republic.

Germany's Uniper SE, the biggest buyer of Russian gas in Europe, is receiving 60% less gas than ordered. Italy's Eni SpA received just half of its requested volumes from state-owned Gazprom PJSC on Friday, and France's Engie SA and Austria's OMV AG have been hit as well.

President Vladimir Putin upended decades of reliable energy relations by gradually curbing supplies in small steps.

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Gas rationing now a real prospect for the European Union - Economic Times

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