European Gas Prices Hit Record High As Germany Blocks Nord Stream 2
European gas futures surged to a record high on Tuesday after Germany blocked Russia’s Nord Stream 2 pipeline from launch because it did not comply with European law.
German foreign minister Annalena Baerbock said all three parties that make up the new government (Social Democrats, Greens, and Free Democrats) agreed that the newly constructed Nord Stream 2 pipeline failed to meet European energy law requirements.
“And that means that, as things stand at the moment, this pipeline can’t be approved because it does not fulfill the requirements of European energy law,” Baerbock said.
And it’s very specific to Europe as the arbitrage to US natgas has never been wider…
While ‘record high’ is enough of a problem, for context, this is equivalent to a $232 price for a barrel of crude oil… strongly suggesting the pressure to switch must be building (and with it demand for crude, which could skupper Biden’s cunning plan to lower US gasoline prices)…
Over the last month, a series of setbacks for the new Russian pipeline have been seen. German energy regulators suspended Nord Stream 2’s certification process, and the US has also sanctioned companies affiliated with the pipeline’s construction.
Baerbock also said geopolitical uncertainties in Ukraine were “also a factor” as Russia has amassed more than 100,000 troops on the border. “The last government discussed with the Americans that if there are further escalations, this pipeline can’t come online,” she added.
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