Global Energy Crisis Just Escalated:

The Global Energy Crisis Just Escalated To An Entirely New Level, And This Is Just The Beginning…

Michael Snyder

Now we are being told that we are all going to “have costs” for the crisis in Ukraine.  More specifically, the global energy crisis just took a dramatic turn for the worse, and so that means that all of us will soon be hit by dramatically higher energy prices.  It is going to be much more expensive to fill up your vehicle, it is going to be much more expensive to heat your home, and increasing costs to transport the goods that we buy will make the overall rate of inflation even worse.  Up to this point, a large chunk of the U.S. population really didn’t have much interest in following the conflict in Ukraine, but now it is going to have a huge impact on every single one of us.

In response to the Russians moving forces into Donetsk and Luhansk on Monday, the Germans decided on Tuesday to put the Nord Stream 2 pipeline on hold indefinitely…

Germany on Tuesday halted the Nord Stream 2 Baltic Sea gas pipeline project, designed to double the flow of Russian gas direct to Germany, after Russia formally recognised two breakaway regions in eastern Ukraine.

Europe’s most divisive energy project, worth $11 billion, was finished in September, but has stood idle pending certification by Germany and the European Union.

Will this hurt Russia?

Of course it will.

But it is also going to hurt Europe.  Following Germany’s announcement, the price of natural gas in Europe shot up by about 10 percent…

But on Tuesday the European benchmark gas price, currently the Dutch March contract, was up 9.8% at 78.95 euros per megawatt hour (MWh) at 1607 GMT, much like the price for the fourth quarter, when Nord Stream 2 had been expected to start.

And this is likely just the beginning of another natural gas price shock in Europe.  Dmitry Medvedev is warning that Europeans “are very soon going to pay €2.000 for 1.000 cubic meters of natural gas”…

German Chancellor Olaf Scholz has issued an order to halt the process of certifying the Nord Stream 2 gas pipeline. Well. Welcome to the brave new world where Europeans are very soon going to pay €2.000 for 1.000 cubic meters of natural gas!

If the price of natural gas actually gets that high, it will be completely and utterly devastating for Europe.

The Europeans never should have allowed themselves to become so dependent on natural gas from Russia, and now a tremendous amount of pain is ahead.

Meanwhile, the price of crude oil surged once again on Tuesday and has now almost reached 100 dollars a barrel…

U.S. crude surged more than 3% at one point to a high of $96. The contract ended the session 1.4% higher at $92.35 per barrel. Brent traded as high as $99.50, before settling at $96.84 per barrel for a gain of 1.52%.

It won’t be too long before the global price of oil goes well beyond the $100 per barrel threshold.

Needless to say, that won’t be good for the global economy at all.

On Tuesday, JPMorgan specifically warned about what an “energy price shock” could mean…

On Tuesday, it was being reported that the price of gasoline in downtown Los Angeles has already risen above six dollars a gallon…

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