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| Fri, 2nd Sep 2022 7:13:00 |
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Russia’s energy influence over Europe ‘is nearly over’ as bloc races to shore up winter gas supplies |
Europe has endured a sharp drop in gas exports from Russia, traditionally its largest energy supplier.
It has deepened a bitter dispute between Brussels and Moscow and exacerbated the risk of recession and a winter gas shortage.
“Europe is heading towards a very difficult winter, probably two years of a very difficult adjustment with a lot of economic pain,” Agathe Demarais, global forecasting director at The Economist Intelligence Unit, told CNBC via telephone.
Agathe Demarais, global forecasting director at The Economist Intelligence Unit, a research and advisory firm, told CNBC that the Kremlin appeared to be weaponizing energy supplies and “burning bridges” with Europe while it still could.
Asked whether Russia’s energy influence over Europe may be coming to an end, Demarais replied, “Yes. Actually, very much so.”
“Europe is heading towards a very difficult winter, probably two years of a very difficult adjustment with a lot of economic pain. But then Europe is essentially going to become more independent with a more diversified mix,” Demarais said.
“And what that means is that Russia’s energy weapon is going to become moot,” she added. “Our view is that Russia knows that and that’s why it is already killing off gas supplies or inflicting uncertainty because it knows that if it wants to do damage to Europe it has to do it now. It is a now or never question.”
Race to fill gas storage
Germany, until recently, bought more than half of its gas from Russia. Yet, Europe’s largest economy is currently ahead of schedule in its race to fill underground gas storage facilities in order to have enough fuel to keep homes warm during the colder months.
Analysts told CNBC that Germany has been able to rapidly fill its gas stocks in recent weeks because of several factors. These include strong supply from Norway, the Netherlands and other countries, falling demand amid soaring energy prices, businesses switching from gas to other types of fuel, and the government providing more than 15 billion euros ($15.06 billion) in credit lines to replenish storage facilities.
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