European nations and governments are awaiting the end of scheduled maintenance of the Nord Stream pipeline on Thursday, as many are anticipating the return of gas from Russia.
The Problem: Prior to the scheduled maintenance, Russia had cut deliveries by 40%, and many European nations are not expecting the Kremlin to resume deliveries after the scheduled maintenance is completed on July 21, as reported by the Wall Street Journal.
In 2021, the European Union imported $108 billion worth of energy from Russia, and it was the third-largest nation for European imports of goods, according to the World Economic Forum.
What To Expect: For large industrial nations such as Germany, governments are telling citizens to conserve hot water, turn off traffic lights at night, stop illuminating historic buildings, and even use less air conditioning, as reported by Fortune.
If Nord Stream were to be closed indefinitely, the European Union will face oil and gas shortages before winter, typically peak demand for energy, as mentioned in the Wall Street Journal report.
Some nations are preparing for an extended closure of the pipeline, as the German energy regulators reported that they have a 14-day supply of gas just in case this scenario occurs, as stated by the Journal.
What This Means For Oil Prices: As crude oil has climbed 6.90% over the past 5 days to $102.39 a barrel as of Tuesday morning, a permanent closure of the Nord Stream pipeline could severely increase the volatility of oil and gas prices as European nations scramble to find supply.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.