European gas futures surged to a record high on Tuesday after Germany blocked Russia's Nord Stream 2 pipeline from launch because it did not comply with European law.
German foreign minister Annalena Baerbock said all three parties that make up the new government (Social Democrats, Greens, and Free Democrats) agreed that the newly constructed Nord Stream 2 pipeline failed to meet European energy law requirements.
"And that means that, as things stand at the moment, this pipeline can't be approved because it does not fulfill the requirements of European energy law," Baerbock said.
Berlin's block of Nord Stream 2 sent European natgas prices to the highest levels ever. Dutch month-ahead gas, the European benchmark, jumped more than 3% to 119.50 euros, surpassing the Oct. 5 high of 117.90 euros.
And it's very specific to Europe as the arbitrage to US natgas has never been wider...
While 'record high' is enough of a problem, for context, this is equivalent to a $232 price for a barrel of crude oil... strongly suggesting the pressure to switch must be building (and with it demand for crude, which could skupper Biden's cunning plan to lower US gasoline prices)...
Over the last month, a series of setbacks for the new Russian pipeline have been seen. German energy regulators suspended Nord Stream 2's certification process, and the US has also sanctioned companies affiliated with the pipeline's construction.
Baerbock also said geopolitical uncertainties in Ukraine were "also a factor" as Russia has amassed more than 100,000 troops on the border. "The last government discussed with the Americans that if there are further escalations, this pipeline can't come online," she added.
Baerbock's comments show Germany's new government aligns with Western imperialism, led by the US, is hellbent to keep Ukraine's gas transit running. Not allowing the new pipeline to open additional supplies to Europe amid a severe crunch in natgas stockpiles has sent electricity prices soaring.
Day-ahead electricity prices above €300 per MWh in France, Switzerland, Austria, Italy, Slovenia, Croatia, Serbia and Hungary. I wonder if when EU officials said back in Sep-Oct that there was not reason to panic they have this in mind… |#EuropeanEnergyCrisis pic.twitter.com/WhvEACR0Oy— Javier Blas (@JavierBlas) December 14, 2021
Germany is shooting itself and the rest of Europe in the foot by not allowing the Nord Stream 2 pipeline to open because they support Ukraine. With a series of cold spells hitting Europe and no signs of the energy crunch abating anytime soon -- it's only a matter of time before people become infuriated with politicians.