Europeans fall prey to prices

Wide impact

"The same effects are seen in the global LNG market too. The EU scrambled to replace Russian gas with other supplies, and its high demand pushed up LNG prices."

She questioned the effectiveness of the price cap on Russian oil at $60 announced by the EU and other Western leaders on Dec 2, saying Russian production costs are well below this cap and that it can also find other global buyers.

Speaking of the West's price cap, Luft said, "It is a hollow, feel-good action that will do nothing to harm Russia financially, let alone cause it to recalibrate its Ukraine policy."

Qin said she does not believe the EU will face major energy supply shortages this winter because of efforts to find alternative suppliers and sufficient LNG supply. "The question is then, at what costs?"

Because of the EU's rising demand for non-Russian energy, global energy prices have gone up significantly, she said. In Europe, natural gas prices are eight times higher than the average level over the past decade. Electricity prices, because of higher fuel prices, are six times as much as the average level in recent years.

"No doubt, the soaring energy costs have impacted EU citizens. Many industries are forced to curb production due to skyrocketing gas and electricity prices. Small business owners and households are facing astronomical energy bills.

"This is the main reason that the European Commission provided a rather pessimistic outlook for the EU economy next year in its latest forecast."

The EU has also drawn sharp criticism for its huge investment in LNG terminals and other related facilities for contradicting the bloc's climate-neutrality goal for 2050.

Rainer Quitzow, research group leader at the Institute for Advanced Sustainability Studies in Potsdam, Germany, said he saw "a risk if we build infrastructure that no longer makes sense if we want to achieve our climate goals".

"Once you have terminals and plants, it might be hard to get away from them, precisely because you have invested so heavily," the German broadcaster DW quoted him as saying.

CHEN WEIHUA in Brussels