Brent crude briefly fell below $100 a barrel on Monday, a week after reaching a 14-year high of $130 on March 6, easing fears of an energy-driven recession and chronically high gasoline prices.

This marks the first major correction in the energy markets after a period of heightened volatility. Last week, Moscow to halt its energy exports in retaliation against Western sanctions by imposing over 800 entities with wide-ranging export bans.

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Alexander Novak, Russia’s deputy prime minister, said his government has the full right to impose an embargo on gas supplies by also halting gas supplies through the Nord Stream 1 pipeline, after Nord Stream 2 was derailed by German officials.

The rise in oil and gas prices triggered by the Ukraine conflict has raised the threat of the worst stagflationary shock to hit Europe since the 1970’s.

Amid heavy reliance on fossil fuels, energy prices in Europe have spiraled out of control, with European natural gas trading at ~$62/mmbtu, translating to $360 per barrel oil on an energy equivalent basis.

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With the United States and the United Kingdom banning Russian energy exports and the European Union announcing it will reduce Russian gas imports by two-thirds by the end of the year, the West is scrambling to replace Russian energy deliveries.

Germany, as Europe’s largest economy is now in dire straits after effectively boxing itself into a corner with its energy policies.

For decades, successive governments in Berlin have pursued a policy of maximizing the country’s dependence on Russian oil and gas, and almost completely ditched nuclear energy, with the final two functional reactors set to be turned off in 2022.

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As a result, Germany has become heavily reliant on natural gas, with the fuel accounting for 25% of the country’s total primary energy consumption.

Although Germany has substantial supplies of natural gas of its own that could be accessed by fracking, Berlin has banned the technology, meaning it has to import 97% of its gas mainly from Russia, Netherlands, and Norway.

With a calamitous energy crisis unfolding, Germany has announced it will join the bandwagon of nations rolling back their climate goals by increasing its use of coal, which overtook wind to become the biggest input for electricity production globally in 2021.

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Indeed, Germany is left with little choice than to burn lignite in its power plants–widely regarded as one of the dirtiest fossil fuels and extracted in vast open-pit mines that litter the German countryside.

The European Commission has already given its absolution to countries replacing Russian gas with coal and producing higher emissions as a result.

Nuclear energy is out of the question considering that few, if any, European nations are as opposed to nuclear energy as Germany is. Last month, German politicians vehemently denounced the EU’s attempt to label nuclear energy as sustainable.

Oil Price.com / ABC Flash Point Embargo News 2022.

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Baroud
Baroud
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18-03-22 19:59

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Bewitched
Bewitched
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18-03-22 20:00

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Kunta Kinte
Kunta Kinte
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Reply to  Bewitched
18-03-22 20:02

Zionist career criminals prefer to rule out their responsibilities intoxicating the world, with carbon fuel and killing Russian speaking citizens in Ukraine since 2014.

Kunta Kinte
Kunta Kinte
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18-03-22 20:00

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