EurOil - Europe Oil & Gas
Algeria has now surpassed Russia as the largest supplier of gas to the Italian market, but Europe is still a long way away from replacing Gazprom.
Russia’s Nord Stream 1 pipeline has finished its annual maintenance period on time and is now back in operation, triggering a modest drop in gas prices. But like before the downtime, the pipeline is running at well under its full capacity.
The European Commission has drawn up a plan detailing a rationing mechanism and rules to pass price increases on to consumers that can be imposed should Russia cut Europe off from gas deliveries.
If Russia cuts off its gas deliveries to Europe then the most exposed countries could see their economies contract by up to 6%, the International Monetary Fund said in its blog on July 19.
Russian companies have been nimble in re-directing trade flows from Europe towards developing countries. If Europe plans to continue giving Russia the cold shoulder, European companies must also learn to look elsewhere to cover the trade shortfall.
Immediate efforts to cut demand vital, says Fatih Birol, as prospect of EU running out of gas reserves in winter looms.