LONDON (Bloomberg) -Natural gas prices in Europe are now more than 10 times their average for this time of year — sparking the destabilization of economies and undermining the euro.
Much of it is due to Russia curbing its shipments against sanctions imposed for military operation in Ukraine.
Meanwhile lower flows from Norway are anticipated into September as a result of maintenance.
In the U.S., a natural gas plant, damaged by an explosion earlier this year, is not expected to restart until October.
The European Union had been depending on natural gas shipments from the U.S. and Norway to make up for Russia’s curtailment.
A number of industries — ranging from aluminum to fertilizers — have been hurt by the soaring costs, Bloomberg noted.
Adding to woes, Russia’s Gazprom PJSC will stop flows on the Nord Stream gas pipeline for three days starting on Wednesday to perform maintenance. Some European officials fear the flows may not start up again.
“Europe simply doesn’t have access to enough alternative supplies to easily compensate for those Russian gas losses,” Samantha Dart, Goldman Sachs Group Inc.’s head of natural gas research, told Bloomberg.
Salomon Fiedler, an economist at Berenberg Bank, told CNN that the sharp increase in natural gas prices makes him confident that Europe is already entering a recession.
“With the recent surge in energy prices — wholesale gas prices in particular — we will probably see quite a bit more inflation for the remainder of this year,” he said.