Zelenskyy accuses Russia of ‘economic terrorism’ as Europe faces winter gas crunch

Ukraine’s President Volodymyr Zelenskyy accused Russia on Monday of economic terrorism by trying to prevent European nations from stocking up on gas ahead of a winter when the impact of soaring energy bills is set to hit households and businesses hard.

How to respond to the rise in gas prices, which has been made worse by a squeeze on supplies from Russia, is top of the political agenda across the continent as autumn approaches.

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Zelenskyy spoke in a video address to an energy conference in Norway. His comments come as Russia’s Gazprom plans maintenance this week that will halt gas flows along the Nord Stream 1 pipeline that links Russia and Germany via the Baltic Sea.

The outage has fueled fears that Russia is curbing supply to put pressure on Western nations opposed to its invasion of Ukraine, a charge Moscow denies.

German benchmark power prices for 2023 breached 1,000 euros per megawatt hour for the first time on Monday as supply concerns kept prices of gas and related fuels such as electricity and coal sky-high.

Czech Prime Minister Petr Fiala said that a response should be coordinated by the European Union (EU) as his nation called an emergency meeting of energy ministers.

“Ahead of the EU Energy Council we want to find a way to help people and businesses that we can agree on with other European leaders,” he added. The Czechs, who hold the rotating EU presidency, said the meeting would be on September 9.

The Czech Republic said last week it was looking at building support for a bloc-wide cap on energy prices, a step that outgoing Italian Prime Minister Mario Draghi has championed.

‘No Lehman Brothers repeat’

Countries such as Germany and Italy, heavily reliant on Russian gas imports for their energy, have been building up storage levels ahead of the cold winter months when demand peaks.

German Economy Minister Robert Habeck said on Monday that German gas facilities were more than 80 percent full and he expects prices to retreat. Italy has hit a similar level, giving a cushion against further supply shocks.

“As a result, the markets will calm and go down,” Habeck said.

Habeck also reiterated that Germany will not allow a Lehman Brothers-style domino-effect to happen on its gas market.

“I promise on behalf of the German government that we will always ensure liquidity for all energy companies, that we don’t have a Lehman Brothers effect on the market,” said Habeck, referring to the US investment bank’s collapse, which helped trigger the 2008 financial crisis.

There was a less upbeat prediction from the head of gas major Shell who warned the gas shortages could persist.

“It may well be that we will have a number of winters where we have to somehow find solutions,” Shell CEO Ben van Beurden told a news conference at the industry meeting in the Norwegian city of Stavanger.

Tesla founder Elon Musk told reporters at the same event that the world must continue to extract oil and gas to sustain civilization, while also developing sustainable sources of energy.

“Realistically I think we need to use oil and gas in the short term, because otherwise civilization will crumble,” Musk said.

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