- Goldman Sachs has warned
Russia could further restrict the supply ofnatural gas toEu rope in response to the EU's oil ban. - The investment bank said more
energy squeezes could seriously dent European growth and send Germany into recession.
Goldman Sachs analysts have said Russia could sharply cut its supplies of natural gas to Europe in response to the EU's oil import ban, deepening the downturn on the continent.
The EU agreed a plan to ban most Russian oil imports on Tuesday, with officials expecting a 90% reduction in supply by the end of the year.
Later on Tuesday, Russia's Gazprom said it had cut off natural gas supplies to Dutch company GasTerra, and would stop shipments to two other companies for its Germany contracts. Gazprom said it was doing so because the companies hadn't complied with demands to pay in rubles.
Goldman analysts, led by Alain Durre and Filippo Taddei, said in a note Tuesday that the chances of further natural-gas cuts have risen, as Russia seeks to retaliate for the oil embargo.
"There is an increased risk that Russia might respond to the oil ban by disrupting its supply of natural gas, potentially leading to a material worsening of the European economic outlook," the analysts wrote.
Tighter supplies could further derail Europe's economy, which many analysts expect to slow sharply over the coming year as it deals with high inflation and the fallout from Russia's invasion of Ukraine.
"The risks to economic growth in the euro area in particular are tilted to the downside," Goldman said.
"In this respect, a sudden stop of energy product imports from Russia, combined with a likely drop in confidence, would most likely put Germany and Italy into recession, and reduce euro area economic growth by more than two percentage points."
The EU used natural gas for 24% of its energy mix in 2020, according to Eurostat. That year, 43% of the bloc's natural gas imports came from Russia.