European gas prices increased by as much as 12% this week after damage was done to the Nord Stream gas pipeline. Images of the gasoline flowing in the Baltic sea have surfaced showing how severe the damage to the pipeline is. Seismologists in Sweden identified two explosions around the pipeline that occurred before the gasoline started spilling out.
As of now the German government is suspecting the damage to be caused by sabotage from another country, though they have not made any direct claims as to who yet. There is evidence to suggest this was planned well in advance though, as The CIA warned Germany weeks ago about the possibility of an attack on the Nord Stream pipeline.
The pipeline is the main source of gasoline flowing from Russia into Germany, and makes up a large source of European gasoline supply as a result. About 35% of Europe's Russian gas imports comes from the Nord Stream 1 pipeline. The market’s reaction on Tuesday is yet another increase of gas prices that will continue to hurt European citizens and impact global gas prices. The damage means that Europe will certainly not be getting any gas through the pipeline for the rest of the winter.
Over the past couple of months Russia has continually been limiting supply from the pipeline, which is seen to be a response to Europe’s support of Ukraine through Russia’s invasion. Back in June the pipeline started flowing through a quarter of the gas it normally supplied. Then in July it was temporarily shut down, only to be reopened with half of the supply coming through. This continued until finally in August, Russia shut down the line completely citing equipment issues.
So while the damage won’t impact any of Europe's oil supply today, it means that the pipeline will be unusable for the foreseeable months ahead.
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