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 region's bloc 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.
China, the world's second-biggest economy and its biggest greenhouse gas emitter, has boosted coal output and imports, as domestic coal prices have hit record levels and power stations have struggled to keep the lights on in homes and factories.
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.
He dismissed any idea that Russia was using energy as a weapon: "This is just politically motivated chatter, which has no basis whatsoever."
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 which 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.
The European Commission outlined measures on Wednesday that the 27-nation EU would take to combat the energy crisis, including exploring joint gas purchasing among countries to cushion price spikes.
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."
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 (2.7 degrees Fahrenheit) 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.
As renewables have failed to fill gaps amid surging demand, oil and gas prices have roared higher.
Benchmark crude was trading close to last week's more than three-year high above $84 a barrel. The benchmark European gas price is up more than 350% this year, trading above $31 per million British thermal units (mmBtu) on Wednesday, although down from last week's spike above $52.
Citi bank raised its forecast for European and Asian benchmark gas prices for the fourth quarter by about $3, saying European prices could average $30.90/mmBtu.
"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," it said.
The Organization of the Petroleum Exporting Countries trimmed its world oil demand forecast for 2021 but said surging gas prices could boost demand as customers switch to oil products.
In China, the most-active January Zhengzhou thermal coal futures touched a record high of 1,640 yuan ($254.54) per ton on Wednesday, up more than 190% so far this year.
Local governments in top Chinese coal producing areas Shanxi and Inner Mongolia ordered about 200 mines to boost output, but rain flooded 60 mines in Shanxi. China's coal imports surged 76% in September.
Seeking to ease the power crunch, Beijing said it would allow power plants to charge commercial customers market-based prices, breaking with a policy that had allowed industry to lock in fixed-price electricity deals with suppliers.