European consumers will suffer the most from the Nord Stream 2 freeze

Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance commented to the Oil and Capital Internet portal on the possible consequences of the Nord Stream 2 certification suspension.

- As the German authorities said earlier, sanctions against the Nord Stream 2 gas pipeline would be imposed in the event of an invasion of the Russian army into Ukraine, this is a matter of principle.

- Theoretically, we should be prepared for the fact that the launch of Nord Stream-2 will not take place. Ordinary Europeans and the European gas market will be the first to suffer from the lack of gas supplies through Nord Stream 2. The next two years will be especially difficult.

- By the way, gas prices immediately reacted to Germany's decision. At the same time, the vulnerability of the European LNG market is also obvious. The main volumes of liquefied gas are sold primarily in Asian markets. In February, the cold season returned to China and Japan, LNG flowed back to Asia, and this is the second factor that will push up prices in the European gas market.

- We must demonstratively fulfill all our obligations on gas supplies. In the future, the question of extending Ukrainian transit will definitely arise. It will be necessary to weigh everything and understand the economic interest of Russia in extending this agreement with Kiev. From my point of view, in the situation of freezing Nord Stream 2, the need for Ukrainian transit will continue until 2030, that is, until the expiration of Russian long-term contracts for gas supplies to the EU countries. It is impossible to completely abandon it. In the minimum volume, pumping through it must be maintained.

- Summarizing all of the above, I would like to note that the freezing of Nord Stream 2 is not critical for Russia. Gazprom has long been fighting over the fate of Nord Stream 2, and high prices have mitigated the economic impact of the pipe's downtime. It seems to me that European consumers will suffer more damage. It will be difficult for the European authorities to do without measures of additional social support for the population.