Russian gas company Gazprom will declare a force majeure on at least one European market and stop sending that market gas. This is a big deal. It is according to a letter that Reuters reported on Monday.
This market is most likely Germany since the letter said that the gas supply in question is delivered through the Nord Stream 1 pipeline. This is the pipeline that is down for maintenance but was supposed to come back on Thursday. Europe has been freaking out that Russia would not turn it back on and it looks like those fears were valid.
A force majeure is a business clause that allows business contracts to be canceled. Usually it refers to something like a hurricane or a pandemic. In order to declare a force majeure, the circumstances must usually be “unforeseeable, external and irresistible.”
Germany and other EU nations have said that they plan to reduce dependency on Russian oil by the year 2027 but that does them no good in the year 2022. If they disagree with this declaration of a force majeure, what are they to do about it? Appeal to an international court? Would Russia recognize that court? After all the big talk of sanctions, how can Germany get Russia to come around on this?
This will leave Germany and surrounding markets quite literally high and dry. High, referring to the record heat wave currently rolling through Europe and dry because…no gas. Already German politicians have been implementing conservation laws from dimming lights, setting thermostat regulations, limiting hot water and shutting down pools. Will this happen in other Western nations that depend on Russian oil and gas? The odds of that are disturbing to contemplate.