Gas prices are soaring globally, largely because of the resurgence of demand for fossil fuels after the Covid-19 pandemic and lockdowns, depleted storage and the difficulty of ramping up supply after the disruptions of the past two years. But prices have also been significantly affected by Russia’s alleged decision to tighten gas supplies to Europe.

Europe is dependent on Russia for about 40% of its natural gas supplies, and despite the expansion of renewable energy over the past two decades, that dependency is increasing as countries shift to gas, away from dirtier coal. Germany is particularly sensitive in this respect, as it has shut down nearly all of its nuclear power stations and aims to eliminate coal by 2030.

A major new gas pipeline, Gazprom’s $11bn Nord Stream 2 from Russia across the Baltic to Germany, which would heat 26m German homes, has been the focus of Germany’s diplomatic relations with Russia since it was announced in 2015. Construction on the 1,200km pipeline was completed last year, but no gas has yet flowed and its future is now in doubt as Germany’s chancellor Olaf Scholz dramatically halted approval for the project on Tuesday.