Germany And Austria Get Ready For Gas Rationing

While there has been almost total opposition in Europe to the Russian invasion of Ukraine - Belarus and Serbia being the only exceptions - much of the continent is now faced with a major dilemma over how to unravel its previous high reliance on Russian oil and gas.

Germany has already stopped the new Nordstream 2 pipeline going into operation, but the fact remains that the country has been relying on Russia for 40 per cent of its gas - and it is not alone in this regard. Russian oil also makes up a significant amount of imports to the now hostile countries lying to its west.

While Russia is itself economically reliant on purchases of its hydrocarbons, the latest step has been to demand payment in Roubles to shore up its ailing currency, a move European nations have refused on contractual grounds. However, there is a distinct possibility that this stand-off could lead to the gas taps being turned off.

In response, the Germans and Austrians have made preparations for possible gas rationing , although their governments have stressed this is not necessary just yet.

Britain is in a more fortuitous position in importing far less oil and gas from Russia. Nonetheless, now may be a time to ensure that oil tank installations enable as much storage capacity as possible to be established, to protect against shortages.

The UK has been talking to Saudi Arabia about securing more supplies, with prime minister Boris Johnson making a high-profile trip to the country. However, the Gulf nation has been unwilling to make a clear commitment to raise production .

Moreover, even Saudi Arabian supplies could be in doubt, with the kingdom’s government admitting the danger as Houthi rebels from the conflict in neighbouring Yemen have been attacking facilities , including a strike at a storage depot in Jeddah that briefly threatened the cancellation of the nearby F1 Grand Prix .

With such uncertainty and rising oil prices, increasing oil storage capacity may be a very wise step for countries and individual consumers alike.