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Europe on the brink of an energy crisis

12 / 10 / 2022

The unprecedented Western sanctions against Russia are expensive not only for Russia. In particular, Europe is now on the verge of an energy crisis, as it has lost most of the Russian gas that used to cover more than 40% of its energy needs, and winter is ahead. For this reason, EU member states agreed on the first coordinated program in July, deciding to reduce gas consumption by 15% from August to March. In the context of the gas leak of “North Stream 1” at the end of September, the problem became more acute.

At the same time, the EU decided to fill its warehouses by 80% by November 1 to meet high winter demand. The EU has reached its stated target ahead of time. According to the data of October 9, 91.2% of EU gas storages are full.

Germany, which has been hit hardest by reduced Russian gas flows and has the EU’s largest storage capacity, has filled its storage facilities to just over 93% capacity, in line with its more ambitious goal of 95% capacity by November. Experts, however, believe that the real danger is the period following the coming winter, starting from February-March when the EU will have serious problems in replenishing its reserves, which were significantly reduced during the winter.

Mandatory saving of electricity, in turn, leads to serious problems in related fields. The industrial sector has already been forced to cut production hours and cut costs due to the energy crisis. Industrial production in the Eurozone decreased by 2.3% in July compared to the previous month. Consumer confidence is at a record low (-28.8% in the eurozone), a worse performance than during the peak of the COVID-19 pandemic.

Problems also arise in the context of mutual trust between EU countries. While most EU countries are conscientious about gas conservation, some such as Ireland, Greece, Sweden, and Spain have actually increased their consumption.

In this context, it is important to emphasize that in mid-July, the President of the European Commission, Ursula von der Leyen, and the President of Azerbaijan, Ilham Aliyev, signed a memorandum to double Azerbaijan’s gas exports in order to reduce dependence on Russian gas and ensure storage for the coming winter. The fact that Azerbaijan is an authoritarian country and that the EU clearly stated that the war unleashed against Armenia in September was, in fact, Azerbaijan’s responsibility, has not and will not affect the EU-Azerbaijan energy cooperation in any way, as the EU recently emphasized. foreign policy chief Joseph Borrell. And this, even temporarily, becomes a serious lever in the hands of Azerbaijan to pressure the EU countries. The position of the latter, therefore, cannot be impartial in any case, and this situation will not be favorable for us, naturally.


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