June 29, 2022: -One analyst alerted that the Group of 7 countries needs to brace for a total shutdown of Russian gas pipelines in the near term, which could have severe effects on Europe’s economy.
“The G-7 has to prepare for a shutdown of gas. The G-7 is dealing with a cutback on oil. Other supplies could be gotten all worldwide. Still, the gas could be shut off, which would have consequences,” Jeffrey Schott, a senior at the Peterson Institute for International Economics, told CNBC.
“Russia already has cut back on gas rushing to Germany and through Ukraine, so shutting down the pipelines is not inconceivable. Russia sells some LNG to Europe but not that much,” he said in the interview.
“The total cut-off of Russian supplies is poking gas rationing at least for the short term,” he added.
“Russian supplies would be partly offset by growing LNG imports, increased supplies from Norway and Algeria, fuel-switching to coal, and conservation measures,” he further said
Gazprom, Russia’s state-backed energy supplier, has reduced its gas flows to Europe by 60% over the previous few weeks. The move prompted Germany, Italy, Austria, and the Netherlands to indicate they could return to coal again.
His comments are coming as the heads of the G-7 wealthiest nations met in Munich, Germany, for their current summit.
As global pressure persists in piling Russia over its assault on Ukraine, Europe is facing “a very tight situation,” Schott told CNBC on Monday.
“They’re playing for time. The better the hatred against Russia, the more Putin risks and perhaps acts to cut off gas to Europe. I see that coming sooner after later,” he further said.