The European gas crisis has intensified after one of Norway’s biggest operators was forced to shut down three oil and gas fields following a workers’ strike. UK gas prices hit three-month highs on Tuesday as energy company Equinor said fields on the Norwegian continental shelf, producing the equivalent of 89,000 barrels of oil a day, would suspend production. Norway’s oil workers’ union Lederne said the strike would extend to three more sites, affecting 333,000 barrels of oil equivalent per day, including 264,000 in natural gas. If the strike escalates, it could affect more than 1 billion barrels equivalent per day or nearly 60% of Norway’s exports from Saturday. Gasco, Norway’s state-owned pipeline operator, told the Financial Times that “in a worst-case scenario, deliveries to the UK could stop altogether.” It said industrial action could force the closure of Sleipner, a distribution hub on the gas pipeline to Easington on the north-east coast. The hub is located on the Langeled Pipeline, which was originally known as “Britpipe” and is one of the world’s longest undersea pipelines, connecting Easington to the Nyhamna terminal in Norway. The terminal at Easington handled 70% of UK imports from Norway between January and April this year and was responsible for 67% of imports from Norway in 2021. But Josef Pospisil, head of utilities at Fitch Ratings, played down the risk to consumers from the potential outage. He said: “We do not expect a significant impact of a short-term reduction in supplies from Norway on gas availability to the UK, as the latter has recently been receiving a record volume of LNG cargoes.” Workers are demanding a pay rise to counter rising inflation, which has been fueled in part by rising oil and gas prices following Russia’s invasion of Ukraine. Britain’s natural gas futures price hit a three-month high of 272.5 Pa therm on Tuesday, up 17.9%. Natural gas prices for delivery next month rose 7% to 302p a heat. Norway’s strikes added to the squeeze on supplies after gas flowing into the EU from Russia was cut. European countries are scrambling to fill their natural gas storage facilities before winter, fearing that Russia will cut off supplies completely. Germany has drafted laws that allow the government to participate in companies affected by rising gas prices. Uniper, which owns gas plants in Germany and the UK, is in talks with the German government about a bailout. In the UK, Business Secretary Kwasi Kwarteng is working with business to boost Britain’s energy supply ahead of winter. Britain gets about a third of its natural gas from Norway and the rest from a combination of the North Sea, Europe and LNG imports from the rest of the world, including the US. The rise in commodity prices since the start of the war in Ukraine has also caused pain for the British. Amid protests over high fuel prices, the RAC reported that the average cost of a liter of petrol rose by 16.59p. in June, breaking the previous record rise of 11 p in a single month in March. The cost of a liter of petrol increased from 174.84 p.m. at 191.43 p.m. and diesel increased by 15.62 p.m. in June, closing the month at 199.05 p.m. Subscribe to the Business Today daily email or follow Guardian Business on Twitter @BusinessDesk Retailers have been accused of profiteering and the Competition and Markets Authority is due this week to report to the government after studying the market. RAC fuel spokesman Simon Williams said: “The rate at which pump prices have been rising over the last four weeks is hard to fathom. Not a day went by in June that gasoline prices didn’t rise, even as the prices retailers pay to buy fuel fell. “There is no doubt that motorists are getting an incredibly raw deal at the pumps at a time when the cost of living crisis is being felt ever more acutely.”
