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Ukrainian President Volodymyr Zelenskyy has told Europeans to expect a difficult winter as Russia indefinitely shuts down its main pipeline that supplies gas to the continent.
Key points:
- The Ukrainian President Volodymyr Zelenskyy says Russia is preparing a "decisive energy blow on all Europeans"
- European Union energy ministers will meet on September 9 to consider a price cap on imported gas
- After announcing multi-billion dollar measures to deal with the disruption, Germany says Russia is "no longer a reliable energy partner"
Gas and power buyers are bracing for further price pain when the markets open on Monday, after Russia said one of its main gas pipelines to Europe would remain shut indefinitely.
"Russia is preparing a decisive energy blow on all Europeans for this winter," Mr Zelenskyy said.
Meanwhile, Russia has said Western sanctions imposed over its invasion of Ukraine and technical issues had caused the energy disruptions.
Since Russia's invasion of Ukraine gas prices in Europe have risen by nearly 400 per cent.
European countries that have backed Ukraine with diplomatic and military support have accused Russia of weaponising energy supplies.
Their energy ministers will meet on September 9 to discuss how to rein in soaring energy prices.
Energy ministers will also consider options — including a price cap on imported gas, a price cap on gas used to produce electricity, or temporarily removing gas power plants from the current EU system of setting electricity prices — a document shows.
Offering urgent, "pan-European credit line support" for energy market participants facing very high margin calls will also be considered, according to the document drafted by the Czech Republic, which holds the EU's rotating presidency.
The document echoed suggestions included in a draft commission note last week, for EU-wide electricity consumption cuts and a power price cap for generators that don not run on gas.
Moscow said last week that it would keep the Nord Stream 1 pipeline, its main gas channel to Germany, closed and G7 countries announced a planned price cap on Russian oil exports.
The Kremlin said it would stop selling oil to any countries that implemented the cap.
Leader says Russia is 'no longer reliable'
On Sunday, German Chancellor Olaf Scholz announced that the government would use income from windfall taxes to lower end-consumer prices for gas, oil and coal.
The measures are part of a 65-billion-euro ($95 billion) package to help citizens and companies struggling with rising inflation.
"Russia is no longer a reliable energy partner," Mr Scholz said.
Former Russian president Dmitry Medvedev accused Germany of being "an unfriendly country" and an enemy of Russia.
"In other words, it has declared a hybrid war on Russia," he said.
Finland and Sweden have announced plans to offer billions of dollars in liquidity guarantees to power companies in a bid to prevent ballooning collateral requirements from toppling firms.
"The margin requirements for futures contracts have increased commensurately with increased daily price fluctuations," the EU document said.
"This makes it almost impossible for an increasing number of companies to keep their hedging positions open, triggering their withdrawal from the futures markets."
Reuters