Gas prices in Europe set a record as the crisis threatens to cause a recession

The Financial Times published a report by David Sheppard, Emiko Terazono and Alice Hancock, entitled: “Gas prices in Europe set a record as the crisis threatens to cause a recession”.

The European Union will hold an emergency meeting of energy ministers, after gas prices rose to an all-time high in Europe on Friday, “which threatens to push the region’s economy into a deep recession”.

The Czech Prime Minister Petr Viala as saying on Friday that the Czech Republic, in its capacity as holding the rotating presidency of the European Council, will summon energy ministers “to discuss specific emergency measures to address the energy situation”.

This came as European gas prices rose to a record high above 343 euros per megawatt hour on Friday, “indicating the stark threat to energy-intensive industries,” according to the Financial Times.

The region’s Fertilizer Industry Association warned on Friday that 70% of production in Europe has been curtailed by rising gas prices, illustrating how the energy crisis is spreading across industries and threatening sectors from the glass industry to food production.

There has been a shortage of gas since Russia reduced exports to Europe on the main Nord Stream 1 pipeline in June.

The gas industry may also face rationing in the winter once the weather turns cold.

The Financial Times notes that governments across Europe are grappling with a cost-of-living crisis caused by Russia’s invasion of Ukraine and subsequent cuts in gas supplies, which European politicians have described as “the weaponization of gas”.

These prices in Europe are 10 times higher than in the US, although this is also the highest level since before the financial crisis as US traders rush to send seaborne LNG cargoes to Europe.

The report ended by saying that Danish Energy Minister Dan Jorgensen tried to emphasize the solidarity of the European Union, saying on Friday that “it is extraordinary that the European Union has been able to remain united in these very difficult times”.