The West is confused by the shutdown of the Nord Stream

The move, writes The Guardian, was taken hours after the G7 countries agreed to impose a ceiling on Russian oil prices in an attempt to stem the flow of funds to Russia.

Gazprom has said deliveries will be suspended indefinitely after a leak is discovered. It states that the pipeline will not be restarted until the repair is complete.

Nord Stream 1 is the largest gas pipeline from Russia to Europe, capable of delivering 55 billion cubic meters of gas per year. The continuation of pipeline deliveries is considered critical to preventing the energy crisis from deepening.

Gazprom’s message on Telegram reads: “Gas supply through the Nord Stream gas pipeline has been completely stopped until complaints about the operation of the equipment are resolved.”

In a social media post, the company said it had found “faults” in a key turbine along a pipeline that brings natural gas from western Russia to Germany and that the pipeline would not operate unless they were fixed.

Early Wednesday morning, Gazprom completely shut off Nord Stream 1 gas supplies in line with an earlier announcement, adding that the shutdown would last three days. The flows were supposed to resume just after midnight on Saturday morning.

The company said work was needed on the only remaining working turbine at the Portovaya compressor station on the Russian end of the pipeline, but German officials questioned that explanation, The Guardian claims.

The timing of the move will raise questions about whether Moscow has reacted to the impending imposition of a cap on Russian oil. The finance ministers of Great Britain, the United States, France, Germany, Italy, Japan and Canada on Friday agreed on a plan to set a price ceiling for Russian oil. This proposal would mean that importers wishing to receive shipping services and insurance coverage from companies based in the G7 countries and EU countries would have to adhere to the price cap for transporting Russian oil. Most likely, this restriction will be introduced from December.

As CNN notes, the Nord Stream 1 pipeline also plays a central role in the ongoing economic conflict between Russia and the West. Since June, Gazprom has reduced flows through Nord Stream 1 to just 20% of its capacity, citing maintenance problems and a dispute over a missing turbine subject to Western export sanctions.

The company has also cut off supplies to several “unfriendly” European countries and energy companies due to their refusal to pay for gas in rubles, as Moscow insists, rather than in the euros or dollars specified in the contracts.

Representatives of “Gazprom” have already said that they blame the sanctions on the disruption of gas supplies to Europe. In a speech earlier this week, Gazprom CEO Alexei Miller pointed out that manufacturer Siemens was unable to repair the turbines used in Nord Stream 1 due to sanctions against the Russian state energy company.

The shutdown will heighten fears that Europe, and Germany in particular, will be forced to significantly cut energy consumption for households and businesses this year.

European countries have rushed to fill up their gas storage facilities in case Russia completely shuts off gas supplies this winter. Warehouses in Germany are currently over 84% full.

Klaus Müller, head of the German grid regulatory agency, tweeted that Russia’s decision to keep Nord Stream 1 offline for the time being raises the profile of the new LNG terminals Germany plans to launch this winter, gas storage facilities and “substantial savings needs” of gas.

Jacob Mandel, senior commodities lawyer at energy consultancy Aurora, said the shutdown of Nord Stream 1 flows “does not materially change the outlook for European Russian gas imports over the past few weeks.”

Mandel said Nord Stream 1 was delivering about 30 million cubic meters a day, or 20% of its 55 billion cubic meters capacity, until the last shutdown. He said that is equivalent to about 3.7 bcm for the rest of the year, or more than 18 bcm if he runs at full capacity. That’s just 4% of Germany’s annual demand and less than 1% of Europe’s annual demand, he said.

Mandel added: “Nevertheless, supplies are hard to secure and it’s getting harder and harder to replace every ounce of gas that doesn’t come from Russia.”

Wholesale gas prices have risen by 400% compared to August last year, which has led to the impoverishment of households and businesses in Europe, Sky News notes.

Another reduction in gas supplies is the last thing Europe needs on the eve of winter, when demand for energy carriers increases, the American channel CNN comments on the situation. The bloc may have increased imports from alternative suppliers and already exceeded its target storage volumes, but a further reduction in supplies could lead to an even greater increase in wholesale gas prices, which are included in retail prices. Consumer price inflation in the 9 countries that use the euro hit 9.1% last month – the highest level in 25 years – according to initial estimates from the EU statistical office. Energy prices were the biggest contributor to inflation, rising 38% year-on-year through August.