On Friday, September 2, Russian energy giant, Gazprom, has officially halted all gas supplies to Europe via the Nord Stream 1 pipeline citing a “previously undetected oil leakage”. This decision is a massive blow to Europe, most notably Germany, which is aggressively trying to fill up its gas storage prior to winter. Now, Europe will be forced to rely even more on Russian gas through various other methods such as purchasing it at a much higher cost from China. This news from Gazprom caused U.S. Equities to slide entering the weekend as many hoped that the energy hyperinflation in Europe would be able to be managed.
As Bloomberg puts it, "it marks a dramatic escalation in Europe’s energy crisis -- and comes just as prices were easing. If the shutdown persists, it puts households, factories and economies at risk, weakening Europe’s hand as it backs Ukraine in the war against Russia."