Russian fuel provides to Europe is not going to resume till sanctions towards Moscow are lifted, the Kremlin has stated.

The Kremlin stated on Monday the Western sanctions had been the only motive behind Russia’s determination to close the Nord Stream 1 pipeline. Moscow initially stated it was shutting the pipeline, which provides fuel to Europe, for upkeep.

“[Gas] pumping issues arose due to the sanctions imposed towards our nation and towards plenty of firms by Western states, together with Germany and the UK,” Kremlin spokesman Dmitry Peskov was quoted as saying by the Interfax information company on Monday. “There aren’t any different causes that would have induced this pumping downside,” he reportedly stated.

“Sanctions that forestall the models from being serviced, that forestall them from being moved with out applicable authorized ensures … it’s these sanctions imposed by Western states which have introduced the scenario to what we see now,” Peskov added.

Peskov’s remark got here amid a deepening vitality disaster throughout Europe additional exacerbated after Gazprom, Russia’s state-run vitality firm, introduced on Friday {that a} three-day upkeep work as a consequence of an oil leak in one of many pipeline’s generators will lengthen indefinitely.

The Nord Stream 1 pipeline, which has been operational since 2011, is the one largest fuel pipeline carrying fuel between Russian and Western Europe.

The European Union snapped again at Moscow’s transfer with the European Fee spokesman saying that the whole halt of fuel flows was made beneath “fallacious pretences”. EU officers have repeatedly accused Moscow of deliberately stemming or decreasing the flows in retaliation for Western sanctions and assist of Ukraine.

America additionally accused Russia of utilizing vitality as a weapon, including although that Europe can have sufficient fuel to face the winter months.

“The US and Europe have been collaborating to make sure enough provides can be found. On account of these efforts, European fuel storage shall be full by the essential winter heating season. We now have extra work to do,” a White Home official informed Reuters information company.

In the meantime, vitality costs have hit new highs, reaching a 30 p.c improve on Monday, forcing international locations to speed up their seek for options to Russian fuel.

France’s President Emmanuel Macron stated the EU must step up plans for renewable vitality merchandise and to reform its electrical energy market. Whereas in Germany, the federal government is actively seeking to differentiate its supply of vitality.

Germany stated on Monday it might hold two nuclear crops on standby past the tip of the 12 months in a coverage U-turn. Germany had determined to desert nuclear vitality in 2011 beneath former Chancellor Angela Merkel within the wake of the Fukushima nuclear catastrophe in Japan.

Following a brand new community stress take a look at, two of the three remaining energy crops would “stay out there till mid-April 2023 in case wanted”, Economic system Minister Robert Habeck stated in an announcement.

Hovering costs

The monetary market instantly reacted to Russia’s determination to indefinitely shut the Nord Stream 1 with the euro sinking on Monday to the bottom in 20 years – beneath $0.99. The worth of the pound – with the British economic system additionally susceptible to rising fuel costs – dropped 0.5 p.c to a brand new two-and-a-half-year low of $1.1444.

“Fuel flows have been curtailed much more than anticipated and we’ve got already seen proof of demand destruction weighing on exercise,” stated Michael Cahill, a strategist at Goldman Sachs. “We now anticipate the Euro to fall additional beneath parity ($0.97) and stay round that degree for the following six months,” he added.

German Chancellor Olaf Scholz on Sunday introduced a $65bn plan to assist individuals and companies deal with hovering costs. Nations throughout Europe are contemplating comparable measures.

In Italy, the federal government lately accredited a $17bn assist bundle to assist protect corporations and households from galloping vitality prices and rising client costs.

That comes on high of some $35bn budgeted since January to melt the impact of sky-high electrical energy, fuel and petrol prices.

Beneath the bundle, Rome prolonged to the fourth quarter present measures geared toward reducing electrical energy and fuel payments for low-income households in addition to decreasing so-called “system-cost” levies.

Finland and Sweden additionally introduced on Sunday plans to supply billions of {dollars} in liquidity ensures to vitality firms.