The fallout from Europe’s energy crisis

The soaring price of gas could see the EU impose a cap on the price of electricity generated by nuclear and renewables, while signs of strain appear in the energy derivatives market, and investors are dumping European stocks.

The Kremlin, Moscow
The Kremlin’s big weapon hasn’t worked so far
(Image credit: © Getty Images)

Moscow’s “indefinite shutdown of Nord Stream 1”, Russia’s main gas connection to Germany, “was supposed to be the Kremlin’s big weapon that would send the wholesale price to new stratospheric levels”, say Ben Hall, Valentina Romei and Sam Fleming in the Financial Times. So far it hasn’t worked. Although they remain historically elevated, European wholesale gas and German electricity prices have instead fallen by 40% and 34% respectively since spiking late last month.

Russia’s share of EU gas imports has fallen from 40% to just 9% since the war began. With German storage tanks 88% full, “confidence is growing in…capitals that Europe can get through the winter without severe economic and social dislocation or energy rationing”.

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.