So Russia is curbing natural gas supplies to Europe at the moment. Officially, it's due to a turbine that's stuck in Canada because of sanctions. Scheduled maintenance also starts on July 11 and runs for two weeks.
The fear is that Russia won't turn the gas back on.
German chancellor Scholz underscored that with his latest comment. He said that Russia is using energy as a political weapon and that "no one believes in technical problems with supply problems."
I think that's a powerful statement because Scholz and his government would have good access to reports on exactly the purported problem that Russia is citing and whether it's real or not.
German year-ahead power prices are at a record 322 euros/MWh, a level that will cripple large swaths of German industry. A heat wave also isn't helping.
In any case, I don't think the market really believes that Russia will cut off Europe yet, or at least it's not fully priced in. If it happens, a brutal recession is guaranteed and it will take the conflict to new levels.