By Michalis Psilos

 

 

There is still a risk that Germany will run out of natural gas next winter, according to the Federal Network Agency.

 

At the same time in France, the ongoing three weeks’ strike at TotalEnergies oil facilities, continues to cause petrol shortages. Situation is improving according to the government, but at least 22.8% of stations were still short of fuel. 

 

European commission has decided to create a new tool- “a price correction mechanism", which will be focused on reducing energy consumption. 

 

Once EU 27 countries agree on the principle of establishing a "dynamic" price cap, the commission will come forward with a limited price and further details. The limit would apply to transactions on the Dutch Title Transfer Facility (TTF), Europe's hub for gas trading- which the commission no longer considers to be representative of current market dynamics. The price cap would be in place until a new benchmark for liquid natural gas (LNG) prices is put in place in March. This new tool would be offered to market operators and they will voluntarily decide whether to use it or not. The Commission has also proposed a system to make possible joint purchases of gas, ensuring too, that EU countries share gas supplies in case of shortages.

 

European authorities are fundamentally optimistic about avoiding a gas and oil shortage. Since natural gas is saved at the same time, i.e. consumption has decreased, Europe will be in a comfortable situation. 

 

Situation is critical. EU tries to escape from double digits of inflation, as the region’s energy crisis continues to inflict huge cost surges onto consumers. 

 

Looking for alternative energy sources 

 

Europe is preparing for a harsh winter. The Ukraine crisis has exacerbated the severe energy crisis that began late 2021 and caused a significant increase in fuel prices around the world.

 

German Chancellor Olaf Scholz is struggling to conclude gas deals in the Arabian Peninsula. For the same reason, French President Emmanuel Macron visited Algeria. Since the start of the Ukraine crisis, European countries have been desperately looking for alternative sources of Russian gas and oil. Qatar, Azerbaijan, Norway and Algeria are four alternative gas suppliers to the EU.

 

Europe is also forced to further strengthen its energy cooperation with the Gulf countries, to create an energy supply system. European diplomatic sources in Brussels told "Naftemboriki" that "the pandemic, the Ukraine crisis, the growing food and energy insecurity, are the main reasons that make the cooperation of the EU with the Gulf countries more necessary than ever".