Germany Completes Uniper Nationalization

Germany decided to nationalize utility company Uniper after the government’s earlier multi-billion bailout failed to save the country’s top gas importer and Putin sent oil prices higher by announcing a partial Russian military mobilization. The German government agreed to buy the remaining stakes, which was owned by Finland’s Fortum, in Uniper to secure its operations and keep its business afloat, as a latest effort to keep electricity and gas flowing in Europe’s biggest economy.

After Russia cut gas exports to the continent in response to Western sanctions, European gas and power prices have skyrocketed this year and left consumers with record high energy bills and utilities with a liquidity shortage.

German Economy Minister Habeck said the government would do everything possible to keep companies stable on the market.

Alongside surging European gas prices, crude oil jumped more than 2% on Wednesday after Putin announced a partial military mobilization, escalating the war in Ukraine and raising concerns of even tighter global energy supplies.

Putin’s move could lead to calls for additional and more aggressive sanctions against Russia from the West.

After buying Fortum’s stake, the German state will hold about 99% of Uniper.

The agreement involves a capital injection of €8 billion. The German government’s capital injection bring the total bailout package to least €29 billion.

Russia, which used to supply around 40% of Europe’s gas needs before its invasion of Ukraine, has cut flows through Nord Stream 1, citing sanctions hampering operations to keep it running. The EU calls that a pretext and says Moscow is using energy as a weapon.

Russia flows via Ukraine have continued, but at a reduced rate. Gazprom said it would ship 42.4 million cubic meters of gas to Europe via Ukraine on Wednesday, in line with recent days.

Eastbound gas flows via the Yamal-Europe pipeline to Poland from Germany were halted on Wednesday, while Russian supply via Ukraine held stable.

Meanwhile in the United States, some Republican and Democratic senators on Tuesday proposed that the Biden administration use secondary sanctions on international banks to strengthen plans for price cap by G7 countries on Russian oil.

Moscow has said it would cut all oil and gas flows to the West if such cap was implemented.

The move by U.S. lawmakers came hours before Putin ordered Russia’s first mobilization since World War II, warning the West that if it continued what he called its “nuclear blackmail” Moscow would respond with its vast arsenal.

Several countries have banned imports of Russian crude and fuel, but Moscow has managed to maintain its revenues through increased crude sales to Asia.

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Do you need to access special insights on this matter?

Start your 7-day free trial  and become a member today

Subscribe to Top Insights Today

Subscribe to Executive Newsletter Top Insights Today

The Executive Newsletter -Top Insights Today- puts global business events in perspective through special insights

Join the ranks of global executives and subscribe to Top Insights Today

Top Insights Today covers insights on energy, clean-tech, oil&gas, mining, rare earths, defense, aviation, infrastructure, manufacturing, electrical vehicles, big-tech, finance and politics of business

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

Tesla Strikes $5 Billion Nickel Deal in Indonesia

Tesla has signed deals worth around $5 billion to buy materials for its electric vehicle (EV) batteries from nickel processing companies in Indonesia, Coordinating Minister for Maritime and Investment Affairs Pandjaitan said. Indonesia, which is Southeast Asia’s biggest economy and has the world’s largest nickel reserves, has been trying to convince Tesla to build a production facility in the country. President Joko Widodo met with Tesla founder Musk earlier this year to drum up investment.

Pelosi to Visit Taiwan Despite China Threats

After reports that the U.S. House of Representatives Speaker Pelosi will visit Taiwan next month, China threatened that it would take “forceful measures” if such a visit occurs. Pelosi will also visit Japan, Indonesia, Malaysia and Singapore according to reports. Taiwan’s foreign ministry said it has not received any information about a visit. 

Pandemic Forces Companies to Change Supply Chain Strategy

After almost two years into the pandemic that has hit supply chains across the globe, U.S. companies have not only been trying to meet demand but they also move to refill inventories. That movement was the key in the 6.9% annualized growth rate the U.S. economy has seen in the fourth quarter of 2021. According to the U.S. Commerce Department, the inventory investments contributed 4.9 percentage points.

Stay informed

error: This content is protected !!