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A possible cap on gas prices in Europe

22 August 2023

Salikhov Marcel R. President, Principal Director on Economic Studies, Head of the Economic Department

Marcel Salikhov, President of the Institute for Energy and Finance gave a comment to Lenta.ru about gas prices in the EU.

"The current increase in gas prices in Europe is associated with strikes in Australia. Despite the fact that the country does not supply liquefied natural gas (LNG) to the EU directly, today all major markets are becoming more connected: LNG is the main source for Europe, so everything that happens in the world affects prices. At least more than a few years ago," Salikhov said.

At the same time, the expert stressed that prices still remain at a relatively low level - about $ 500 per thousand cubic meters. On the other hand, seasonal price growth is expected soon, which, however, may not be critical due to the high level of UGS occupancy.

A sharp jump in prices, according to Salikhov, can still occur due to some unforeseen circumstances, for example, an abnormally cold winter.

"There will be a cold winter, there will be an increase in prices, gas may rise up to $ 1,000. But it's hard to do anything about the weather conditions. In any case, LNG is a global market, external factors, including concerns about strikes, have a noticeable effect on it," the economist concluded.

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