Russia’s Gazprom told its European customers that it cannot guarantee gas supplies due to “extraordinary” circumstances.
The letter sent to customers ups the ante in an economic tit-for-tat between the West and Moscow over its invasion of Ukraine. The Russian state gas monopoly sent out a letter on July 14 saying it was retroactively declaring force majeure on supplies from June 14.
The news comes as the key pipeline that delivers Russian gas to Germany and beyond, Nord Stream 1, is undergoing 10 days of annual maintenance, which began on July 11. During maintenance, the flows through the pipeline are at zero. The scheduled shutdown is supposed to conclude on Thursday. But Europe has feared Russia would use it as an excuse to keep the pipeline shut down for longer.
The letter has only added to these fears. Europe thinks Moscow may not restart Nord Stream 1 at the end of the maintenance period in retaliation for sanctions imposed on Russia over the war in Ukraine.
If Russia does keep Nord Stream 1 shut down, it will only heighten an energy crisis that risks tipping the region into a recession.
Known as an “act of God” clause, force majeure is a standard in business contracts. It defines extreme circumstances that release a party from its legal obligations.
The declaration by Gazprom does not necessarily mean it will stop its deliveries, but rather means it should not be held legally responsible if it fails to meet its contract terms.
For months, Russian gas suppliers have been declining via major routes.
Gazprom had already cut the pipeline’s capacity to 40 percent on June 14, citing the delay of a turbine under maintenance work in Canada by the equipment supplier Siemens Energy. Canada sent the turbine for the Nord Stream gas pipeline to Germany by plane on Sunday after the repair work had been completed, and the turbine is meant to be in Russia in the coming days.
Experts and analysts say the letter sounds like a first hint that Russia’s gas supplies will not resume after the maintenance period ends. Trading experts warn that the force majeure could mean the next step in an ongoing escalation between Russia and Europe.
Among those who received the letter was Uniper, which is Germany’s biggest importer of Russian gas. Uniper formally rejected the claim as unjustified.
Europe is already experiencing an energy crisis. This week, Europe’s energy crisis has deepened amid record heat waves across the continent. Beyond the Russian war in Ukraine, European leaders are pushing for an energy future that is free of dependency on Russia.