The energy supply situation in Germany has improved since Russia halted gas exports last winter, but instability in the Middle East could still escalate energy prices, according to E.ON‘s chief executive.
Germany’s long-standing energy partnership with Russia ended abruptly following Russia’s invasion of Ukraine in February 2021, forcing Germany to seek alternative supplies and contributing to a recession.
E.ON CEO Leonhard Birnbaum stated in an interview with the Rheinische Post that gas shortages this winter are unlikely, citing full storage and reduced purchases by China, the biggest buyer of liquefied gas.
However, he cautioned that Germany’s reliance on LNG from the Gulf makes it vulnerable to regional instability, which could affect all energy markets, including oil, gas, and electricity prices.
The Arabian Gulf, a key passage for oil and LNG, could be impacted by escalating tensions.
The Houthi militants in Yemen, backed by Iran, have increased attacks in the Red Sea, supporting Hamas in Gaza, leading some shipping companies to change routes.
Additionally, Birnbaum confirmed that Germany’s decommissioned nuclear plants, including Isar 2, the last operational plant shut down in April, will not be reactivated, contrary to some opposition politicians’ suggestions. Isar 2 is already being dismantled, making its reactivation technically impossible.
