Europe risks rolling power outages if there is a prolonged period of cold weather this winter, according to the chief executive of Trafigura, one of the world’s biggest commodity traders.
Speaking at the FT Commodities Asia Summit, Jeremy Weir said there was still insufficient natural gas in the region despite the promise of increased flows from Russia.
“We haven’t got enough gas at the moment quite frankly. We’re not storing for the winter period,” he said. “So hence there is a real concern that. . . if we have a cold winter that we could have rolling blackouts in Europe.”
President Vladimir Putin last month ordered Russia’s state gas giant Gazprom to begin filling the storage facilities it controls in Germany and Austria, boosting hopes that exports to Europe would rise.
However, there has been only limited increases in supply from Russia over the past week and on Monday Gazprom booked lower pipeline capacity for December. Russia has denied restricting exports to Europe but has been accused by lawmakers of trying to put pressure on Germany to speed up the authorisation of the controversial Nord Stream 2 pipeline.
European wholesale prices eased slightly last month but remain more than four times the level of a year ago and have risen in recent days. Some industries have already cut production as a result of record prices, including Trafigura’s Nyrstar zinc business, but there remain fears that the market will remain tight until the spring. Europe is heavily reliant on gas after phasing down coal-fired power generation.