The energy crisis

The German government has approved a package of measures aimed at reducing gas consumption during the upcoming heating season, Economy Minister Robert Habeck told reporters after a cabinet meeting in Berlin on Wednesday.

The measures include reducing the heating temperature in offices and public institutions – with the exception of social institutions like hospitals – from 20 to 19 degrees Celsius (68 to 66 degrees Fahrenheit). Also, outdoor advertising and the lighting of storefronts and monuments will be turned off from 10pm to 6am local time. Moreover, store owners will be urged to refrain from keeping the doors to their premises open for too long at a time to preserve heat.

The measures are expected to be put into effect gradually from September 1 through October 1. There are also plans to turn off the heat in the corridors, foyers, and technical rooms of public buildings, and ban private home pools from being heated with gas.

www.rt.com/business/561479-germany-energy-saving-plan

Queensland Senator Matt Canavan says Russian President Vladimir Putin is just “doing exactly” what Europe wanted in shutting coal and gas supply.

Mr Canavan said Europe wanted to shut off the gas, coal and oil.

“They’ve been wanting to do that yesterday,” he told Sky News Australia.

Russian nuclear power giant Rosatom will begin constructing two new nuclear reactors in Hungary in the coming weeks, Hungary's foreign minister said.

The deal, reached between Russia and the EU state in 2014, aims to expand the existing Paks nuclear plant.

Russia's nuclear industry has not been subjected to EU sanctions over its bloody invasion of Ukraine.

Moves to isolate and sanction its oil and gas exports have not been unconditionally supported by Hungary.

The Paks site currently generates 40% of Hungary's electricity supply.

"Let the construction begin!" said Foreign Minister Peter Szijjarto in a Facebook post.

With the additional two reactors, the nuclear power station - currently made up of four Soviet-built reactors - will see its capacity more than double.

"This is a big step, an important milestone," Mr Szijjarto said in a Facebook post quoted by AFP news agency.

"In this manner we will ensure Hungary's energy security in the long term and protect Hungarians from wild swings in energy prices."

He added that the nuclear reactors could be ready for service by 2030.

The controversial €12.5bn (£10.6bn; $12.4bn) project is largely financed by Russia.

www.bbc.com/news/world-europe-62695938

Belgium's energy minister has warned that EU countries will face five to 10 terrible winters if nothing is done to reduce natural gas prices.

Calls are mounting for an EU-wide cap on the price of gas and its decoupling from the price of electricity.

EU states have been struggling with huge energy price hikes since key gas supplier Russia invaded Ukraine in February, triggering sanctions.

Countries backing Ukraine are trying to cut imports of Russian gas and oil.

Russia, which supplied the EU with 40% of its gas last year, has in turn restricted supplies.

Belgian Energy Minister Tinne Van der Straeten wrote on Twitter that gas prices in Europe needed to be frozen urgently, adding that the link between gas and electricity prices was artificial and needed to be reformed.

"The next five to 10 winters will be terrible if we don't do anything," she said. "We must act at source, at European level, and work to freeze gas prices."

Electricity prices have also been soaring in Europe, and reached record highs this week. Gas is a major source of electricity generation.

"We have to stop this madness that is happening right now on energy markets," Austria's Chancellor Karl Nehammer said.

Electricity prices must go down, he said, calling on the EU to decouple electricity and gas prices.

"We cannot let [Russian President Vladimir] Putin determine the European electricity price every day," he added.

www.bbc.com/news/world-europe-62710522

There’s not enough capacity in the world to replace Russia’s gas supply to the European Union, while Moscow has plenty of markets to sell its energy to, the former executive vice president at Saudi Aramco, Sadad Al-Husseini, told CNBC on Monday.

“The US doesn’t have the LNG capacity to replace Russia’s exports to Europe,” he said, noting that power bills across the EU are set to soar this winter.

According to Al-Husseini, that could lead to serious problems on the global energy market. “This situation is a new world, and it’s not a very good one for energy,” he warned.

“In any case, there isn’t enough LNG capacity in the world to make up for the Russian exports to Europe,” the former executive said, adding that, “It will take years for the EU to find resources to replace Russian supply.”

As regards to Moscow losing EU buyers, he noted that, despite Western sanctions, there are “plenty of alternative markets” for Russian energy, including China, Japan, or India.

Meanwhile, Europe does not have alternative energy sources, he said, “while the US is maxed out already, North Africa has got problems,” and OPEC is also running out of spare capacity. “So, it’s a global problem,” he said.

The official suggested that, while the Russian economy may suffer under Western sanctions, the rest of the world will be suffering with them. However, he stressed that “Russia may recover a lot sooner than Europe.”

www.rt.com/business/561749-eu-no-alternative-russian-energy

Mounting oil demand from some of the world’s biggest economies has helped Russia to export almost as much crude as it did before the conflict in Ukraine and subsequent Western sanctions, the Wall Street Journal reported on Monday.

On top of this, rising global crude prices, which have currently settled at around $100 a barrel, have sent Russia’s oil revenues skyrocketing.

“Russia is swimming in cash,” Elina Ribakova, the deputy chief economist at the Institute of International Finance, told the journal, adding that the country earned $97 billion from oil and gas sales through July this year, with nearly $74 billion of that coming through sales of crude.

According to data from the International Energy Agency, Russia pumped 7.4 million barrels of crude and products such as diesel and gasoline into the global market each day in July alone. The figure is down only about 600,000 barrels per day since the start of the year.

Russian energy exports have been booming, as the nation managed to find “new buyers, new means of payment, new traders and new ways of financing exports,” the media outlet reports, citing oil traders, former Russian industry executives, and shipping officials.

“There came a realization that the world needs oil, and nobody’s brave enough to embargo 7.5 million barrels a day of Russian oil and oil products,” Sergey Vakulenko, an analyst and former Russian energy executive, said.

As soon as Western buyers and their Pacific allies opted to cut back imports of Russian oil, most of the volumes were redirected to Asia and the Middle East, where countries have decided not to take sides in the Russia-Ukraine conflict.

Indian companies went from near-zero Russian oil imports to almost a million barrels per day. State-owned Indian Oil signed a contract with Rosneft to lock in supplies until 2028.

www.rt.com/business/561752-russia-oil-revenue-sanctions