The butterfly effect seems to be at work in European energy markets. The crisis affecting this sector is likely to escalate further, due to a strike on the Norwegian hydrocarbon extraction platforms.
“The public energy group Equinor has already had to close three oil and gas fields, since the beginning of the strikes, decided Monday evening by unions demanding wage increases to compensate for galloping inflation”relate le Financial Times. Only 1% of Norwegian gas exports are currently concerned. But if the protest movement continues, the protesters could “completely block” sending hydrocarbons to the UK, according to Scandinavian pipeline operator Gassco.
The strikers say they want to shut down four new deposits from Wednesday July 6th. “If no agreement is reached, they are threatening to increase the pressure this Saturday, and to prevent or reduce production at 14 other sites, which would reduce Norwegian gas exports by 56%.”
Stock up for the winter
“This threat to the Norwegian supply comes at a time when European countries are trying to stock up as quickly as possible, in anticipation of the winter period”, explains the title. In a context of energy crisis linked to the war in Ukraine, Westerners want to break away from their dependence on Russian hydrocarbons. To do this, “Europe has turned to Norway, which is traditionally the second largest supplier of gas to the Old Continent, behind Russia”.
Norwegian hydrocarbons are all the more important as Russian gas deliveries via the Nord Stream 1 pipeline have decreased. “Last month, Russia’s state-owned Gazprom cut deliveries through the pipeline by 60%, citing technical issues related to European sanctions against Moscow.reminds the Financial Times. It has also refused to use other channels to secure European orders.
“For Europe, this comes at the worst time”, explains to the newspaper Tom Marzec-Manser, an analyst at the consulting firm ICIS. On the Old Continent, energy prices have been under pressure for weeks, “which [jusqu’à présent] resulted in a significant increase in costs for companies, as well as for households”. The euro, for its part, fell to its lowest level against the dollar in two decades, in particular because of the “worries” on the energy issue.