Russian President Vladimir Putin attends a session of the Russian Energy Week International Forum in Moscow on Oct 13, 2021. (SERGEI GUNEYEV / SPUTNIK / AFP)

MOSCOW/BRUSSELS - President Vladimir Putin said on Wednesday Russia was not using gas as a weapon and was ready to help ease Europe's energy crunch as the EU called an emergency summit to tackle skyrocketing prices.

Energy demand has surged as economies have rebounded from the pandemic, driving up prices of oil, gas and coal, stoking inflationary pressures and undermining efforts to cut the use of polluting fossil fuels in the fight against global warming.

Energy demand has surged as economies have rebounded from the pandemic, driving up prices of oil, gas and coal, stoking inflationary pressures and undermining efforts to cut the use of polluting fossil fuels in the fight against global warming

The energy crunch has amplified Wednesday's call by the International Energy Agency (IEA) for tripling investment in renewables to steady markets and fight climate change.

Europe's gas squeeze has shone a spotlight on Russia, which accounts for a third of the region's supplies, prompting European politicians to blame Moscow for not pumping enough.

Putin told an energy conference in Moscow that the gas market was not balanced or predictable, particularly in Europe, but said Russia was meeting its contractual obligations to supply clients and was ready to boost supplies if asked.

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He dismissed accusations that Russia was using energy as a weapon: "This is just politically motivated chatter, which has no basis whatsoever."

The European Union has not asked Russia to increase supplies of gas to the bloc, a European Commission official told Reuters.

Russia and Europe have been embroiled in a dispute over a new pipeline, Nord Stream 2, to supply Russian gas to Germany. The pipeline is built but awaits approval to start pumping, amid opposition from the United States and some Europeans nations that fear it will make Europe even more reliant on Russia.

Some European politicians say Moscow is using the fuel crisis as leverage, a charge it has repeatedly denied.

De-gas Europe

The European Commission outlined measures on Wednesday that the 27-nation EU would take to combat the energy crisis, including exploring a voluntary option for countries to jointly buy gas.

Ministers from EU countries hold an extraordinary meeting on Oct 26 to discuss the price spike.

"The only way to fully decouple gas from electricity is no longer to use it to generate power," EU energy policy chief Kadri Simson said. "This is the EU's long-term goal, to replace fossil fuels with renewables."

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The Paris-based IEA said the world had to invest $4 trillion by 2030 in clean energy and infrastructure - triple current levels - to achieve net zero emissions and limit global warming to 1.5 degrees Celsius by 2050, the target of the 2015 Paris climate accord.

"The world is not investing enough to meet its future energy needs," it said in a report, published before the United Nations COP26 climate change conference in Glasgow, Scotland, which starts on Oct 31. 

Winter Spike?

As renewables have failed to fill gaps amid surging demand, oil and gas prices have roared higher.

The Organization of the Petroleum Exporting Countries trimmed its world oil demand forecast for 2021 but said surging gas prices could mean customers switch to oil.

Benchmark crude was trading close to last week's more than three-year high above $84 a barrel.

Putin said that oil prices could reach $100 a barrel. "This is quite possible," he said. "We and our partners at OPEC+ are doing our utmost to stabilize the market."

The benchmark European gas price is up more than 350 percent this year, trading above $31 per million British thermal units (mmBtu) on Wednesday, although down from last week's spike above $52.

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"Current prices are above fundamentally justified levels, should remain volatile and could still reach $100/mmBtu or above this season if the weather gets very cold," Citi bank said as it also raised its forecast for European and Asian benchmark gas prices for the fourth quarter by about $3.

The United States was also likely to feel the pain, according to the Energy Information Administration, which warned on Wednesday that it would cost more to heat US homes this winter. 

The European Network of Transmission System Operators for Gas, which monitors security of supply, said a cold winter in Europe would require an increase of gas imports by about 5 percent to 10 percent compared to previous maximum levels.

"We're reaching out to trade partners to discuss if it's possible to increase their deliveries in the market," EU energy commissioner Kadri Simson said.

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The Commission expects prices to remain high until April 2022.