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Mr. Borkhataria said Russia’s actions in Germany could lead to “contagion and knock-on effects” across Europe because the gas markets are connected. So, for example, restrictions on flows to Germany are likely to affect prices in Britain.
Russia is also inflicting financial damage on its corporate customers. One concern is that utilities that have contracts to buy gas from Gazprom will find themselves short of the fuel and then need to buy additional supplies at much higher prices to fulfill their obligations, leading to losses.
“Due to the restrictions on the Nord Stream 1 pipeline, only significantly smaller quantities of gas are currently coming from Russia, and replacements can only be procured on the markets at very high prices,” said Klaus-Dieter Maubach, chief executive of Uniper, a German utility, in a statement. Uniper has said it is receiving only 30 percent to 60 percent of its requested volumes.
The shortages have driven gas prices to extraordinarily high levels, about six times what they were a year ago. Mr. Habeck warned that the such high prices were forcing energy providers to take on losses, which could threaten the entire energy market.
The Russia-Ukraine War and the Global Economy
A far-reaching conflict. Russia’s invasion on Ukraine has had a ripple effect across the globe, adding to the stock market’s woes. The conflict has caused dizzying spikes in gas prices and product shortages, and has pushed Europe to reconsider its reliance on Russian energy sources.
“If this minus gets so big that they can’t carry it anymore, the whole market is in danger of collapsing at some point,” Mr. Habeck said, drawing a parallel to how the collapse of Lehman Brothers triggered the global financial crisis.
Mr. Maubach welcomed the government’s emergency plan as a “viable instrument” for coping with the gas situation for now, but warned that more extensive measures would be needed “if the supply situation remains like this or becomes even worse.”
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