Europe’s energy crunch shows little sign of easing. Natural gas markets, the root of the problem, remain on edge because supplies are tight, and traders doubt whether the continent has enough of the fuel stored to last a cold winter without disruption.
The buildup of Russian troops on the border of Ukraine, through which Russian gas flows to the West, also has added to concerns about whether gas will run out. Already, low volumes of gas from Russia, Europe’s main source of imports of the fuel, have helped raise prices in recent months.
“There is a risk of supply shortages that could erode economic growth and trigger public discord,” said Henning Gloystein, a director for energy and climate at Eurasia Group, a political risk firm, adding that blackouts are possible in a worst-case scenario. Mr. Gloystein said that should the situation worsen, governments might order factories cut their gas use to ensure that households have enough to keep warm.
On Tuesday, gas on the TTF trading hub in the Netherlands hit a record level of about $60 per million British thermal units on reports that flows in a pipeline that takes Russian gas to Germany were being switched back toward the East. (European gas prices have doubled this month and are roughly 15 times what gas is selling for in the United States.)
Mr. Gloystein said this change of direction might reflect opportunistic trading activity rather than sinister maneuvering by Moscow, but the fact remains that natural gas markets in Europe are ready to soar at the slightest provocation.
Tensions between Russia and the West over Ukraine make it very unlikely that the giant Nord Stream 2 pipeline from Russia to Germany will open anytime soon and bring relief.
On a call with reporters on Tuesday, Karen Donfried, the assistant secretary of state for European and Eurasian affairs, said Washington considered Nord Stream 2 “a Russian geopolitical project that undermines the energy security and the national security of a significant part of the Euro-Atlantic community.”
Ms. Donfried said the United States was working closely with the new German government to strengthen Europe’s energy security. Attracted by high prices, energy companies are instructing ships carrying liquefied natural gas to change their destinations from Asia to Europe, but even that switching may not be enough to replace Russian gas or significantly ease the crunch.
“The market knows there is more L.N.G. coming,” said Laura Page, an analyst at Kpler, a research firm. “But it doesn’t seem to be having any impact on sentiment.”
Because gas is a key fuel for generating electricity, electric power prices also are soaring across Europe. In Britain, for instance, steady power was trading on Tuesday for about 340 pounds, about $450, per megawatt-hour, a wholesale metric, on the Epex Spot exchange. That’s about three times the average price of electricity over the year.
Understand Russia’s Relationship With the West
The tension between the regions is growing and Russian President Vladimir Putin is increasingly willing to take geopolitical risks and assert his demands.
The high gas prices of recent months will eventually lead to rises in energy costs for households in Britain and other countries. Martin Young, an analyst at Investec, a securities firm, forecast in a recent note to clients that British consumers, who have been protected by price ceilings, could see their energy bills rise more than 50 percent when adjustments are announced early next year.
In recent days, the closure of three French nuclear plants to check for faults has further stoked the power market.
“It’s becoming the new normal for this winter,” Mark Devine, a trader at Sembcorp, an energy firm, said of the elevated prices.