Shivani Singh and Kate Abnett by Vladimir Soldatkin

MOSCOW/BRUSSELS/BEIJING (Reuters) – President Vladimir Putin said on Wednesday Russia was not using gas as a weapon and was ready to help ease Europe’s energy crunch as the region’s bloc called an emergency summit to tackle skyrocketing prices.

The rise in energy demand as countries recover from the pandemic has driven up oil and gas prices, fueling inflationary pressures.

China, which is second in world economic importance and also emits the most greenhouse gasses, has increased coal imports and output. As domestic coal prices rise to record levels, power stations are struggling to provide electricity for their customers.

This energy crisis has intensified Wednesday’s appeal by the International Energy Agency to triple investment in renewables, which will help stabilize markets and combat climate change.

Europe’s crisis over gas has put Russia in the spotlight. Russia accounts for about a third region’s supply. This led European politicians to accuse Moscow of not pumping enough.

Putin spoke at a Moscow energy conference, stating that there was no gas market balance or predictability, especially in Europe. However, Russia is meeting its contract obligations and would be ready to increase supplies, if needed.

He denied any suggestion that Russia used energy to make weapons: “This is political chatter which doesn’t have any basis.”

Russia and Europe were involved in a conflict over Nord Stream 2 – a pipeline that supplies Russian gas to Germany. The pipeline has been built, but it is still awaiting approval before pumping. This comes amid resistance from some European nations and the United States.

Some European lawmakers claim Moscow is using fuel crises as leverage. This accusation it has denied repeatedly.

DE-GAS EUROPE

The European Commission laid out Wednesday the measures the 27-nation EU would adopt to tackle the energy crisis. This included joint gas purchase between countries in order to mitigate price increases.

On Oct. 26, the EU nations hold an extraordinary meeting to discuss the price rise.

Kadri Simonson, EU energy policy chief said that the only way to decouple fully gas and electricity is to stop using it to produce power. “This is EU’s long term goal: to replace fossil fuels using renewables.

According to the Paris-based IEA, $4 trillion must be invested by 2030 by the world in clean energy and infrastructure – triple the current level – in order to reach net zero emission and keep global warming below 1.5 degrees Celsius by 2050 (the target set by the 2015 Paris climate agreement).

According to the report released before the United Nations COP26 conference on climate change in Glasgow (Scotland), which begins Oct. 31, “The world isn’t investing enough”

What is WINTER SPIKE?

Oil and gas prices are rising because renewable sources have not been able to meet the demand.

Last week’s record-breaking $84/barrel benchmark crude oil price was still close. Although the European benchmark gas price rose more than 350% in 2018, it was trading at $31 per million British thermal unit (mmBtu), which is still higher than last week’s high of $52.

Citibank raised the price of benchmark gas in Europe and Asia for the fourth quarter by $3. It said that European prices would average $30.90/mmBtu.

“Current prices are above fundamentally justified levels, should remain volatile and could still reach $100/mmBtu or above this season if the weather gets very cold,” it said.

Organization of the Petroleum Exporting Countries reduced its forecast for world oil demand, however said that surging prices of gas could increase oil product demand.

The record-breaking January Zhengzhou thermal co futures reached 1,640 Yuan ($254.54) per ton on Wednesday in China. This is an increase of more than 190% this year.

The local governments of top coal-producing areas in China, Shanxi and Inner Mongolia, ordered 200 new mines to increase output. However, rains flooded sixty mines in Shanxi. China’s imports of coal rose 76% during September

Beijing declared that power plants would be allowed to charge commercial customers market-based electricity prices in an attempt to relieve the current power shortage. It was a break with previous policies which had enabled industry to secure fixed-price deals with suppliers.

($1 = 6.4430 renminbi)