Europe is preparing for Russian gas to be cut off this winter

“Social peace in Germany is being challenged,” declared Robert Habeck, Germany’s vice-chancellor, on July 7th. The villain: natural-gas prices. Russia is throttling Europe’s supplies in revenge for its support for Ukraine. In Germany, which relies on Russia for around one-third of its gas imports, energy bills are expected to soar. Gas prices will cause firms huge losses; ultimately, Mr Habeck fears, they could trigger a financial meltdown. The ultimate threat—a complete Russian cut-off—looks ever more plausible.

Gazprom, Russia’s state-controlled gas goliath, has been squeezing the Europeans for months. s&p Global, a research firm, reckons that in June Russia piped just 4.7bn cubic metres (bcm) to Europe, barely a third of the level in early 2021 (see chart 1). The biggest gas flows come via Nord Stream 1 (ns1), which links Russia to Germany via the Baltic sea. (Nord Stream 2, a new pipeline on the same route, was denied approval by Germany as punishment for Russia’s aggression.)