Europe's energy crisis could escalate if governments don't cover $1.5 trillion in margin calls, Norwegian energy firm says

• Europe's energy crisis could worsen if governments don't cover $1.5 trillion in margin calls, a Norwegian energy exec told Bloomberg.
• Energy trading on the continent could stop entirely as capital shifts to guaranteeing trades amid volatile prices.

Europe's energy crisis has made for volatile trading and uncertain markets, but things could get even worse unless governments provide liquidity to cover margin calls of at least $1.5 trillion, a Norwegian energy exec told Bloomberg.

Prices are fluctuating with such a broad range that firms are struggling to manage margin calls, which is when additional collateral is demanded to guarantee trading positions. Increasingly, companies have been forced to secure multibillion-euro credit lines, according to the report.

"Liquidity support is going to be needed," according to Helge Haugane, Equinor's senior vice president for gas and power. He noted that derivatives trading is where support will be needed, and that the $1.5 trillion estimate is "conservative."

"This is just capital that is dead and tied up in margin calls," Haugane said. "If the companies need to put up that much money, that means liquidity in the market dries up and this is not good for this part of the gas markets."

The exec also explained that EU intervention would make sense for derivative trading in the energy markets right now, although it would be difficult to install price caps, which policymakers have weighed.

Meanwhile, over the weekend Sweden announced emergency liquidity support to electricity companies, the Financial Times reported. The nation's prime minister announced that the government would furnish hundreds of billions of kroner to fund companies that have been squeezed by soaring prices.

The government in Finland, too, agreed to establish a $10 billion emergency funding program to assist utility companies under strain from high collateral demands and uncertain energy markets.

Still, far more trouble could loom still for the continent according to Germany's Uniper. The utility's CEO said Tuesday that historic prices are dragging on consumers.

"Look, the worst is yet to come," Klaus-Dieter Maubach told CNBC. "What we see on the wholesale market is 20 times the price that we have seen two years ago — 20 times."