(Reuters) – Germany’s gas supply situation is far better than it was after Russia cut off supply last winter but instability in the Middle East could still send energy prices soaring, the head of energy firm E.ON said.
The sudden collapse of Germany’s decades-old energy relationship with Russia after Moscow’s Feb. 2021 invasion of Ukraine left Germany scrambling for supply and slowed Europe’s largest economy, tipping it into recession last year.
“It would take a lot for there to be gas shortages this winter,” CEO Leonhard Birnbaum told the Rheinische Post newspaper in an interview published on Tuesday, noting stores were full and China, the largest buyer of liquefied gas, was now buying less.
Yet because much of the LNG which Germany now relies upon comes from the Gulf, instability there would have an impact, he noted.
“If there is an escalation, that would have an impact on all energy markets,” he said. “They are more interwoven than before: not only the oil price, but also gas and electricity prices. The Persian Gulf is the central route for oil and LNG.”
Iranian-backed Houthi militants in Yemen have stepped up attacks on vessels in the Red Sea to show their support for Palestinian Islamist group Hamas fighting Israel in Gaza.
The attacks have prompted some shipping companies to reroute vessels.
Birnbaum added that there was no prospect of Germany’s decommissioned nuclear plants ever being reactivated, something opposition politicians have called for since Isar 2, Germany’s last plant, was switched off in April.
“Isar 2 won’t go back online,” he said. “It’s already being dismantled. It’s no longer even technically possible.”
(Reporting by Thomas Escritt; editing by Jason Neely)