HomeMediaMedia PublicationsAnalyticsSpring expectations. Is Europe ready for a gas market shake-up?

Spring expectations. Is Europe ready for a gas market shake-up?

20 April 2022

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting
Тип: Analytics

The InfoTEK telegram channel has published an author's column by Alexey Belogoryev, Deputy Principal Director on Energy Studies at the Institute for Energy and Finance - "The Spring Expectations" on the current situation in the European gas market.

To avoid sudden movements

The situation on the European gas market is not yet conducive to sudden movements associated with the introduction of direct physical restrictions on the import of Russian gas. However, it is impossible to exclude the implementation of those discussed - either to impose a special semi-protective duty on Russian exports (although the growth of spot gas prices in this case can cover Russia's losses from the duty itself), or to establish marginal wholesale prices (but this is also a very risky experiment leading to a shortage of gas).

As far as the EU countries are ready to shake up the gas market, we will find out already in May based on the solution of the most painful issue now - the forced conversion of gas payments into rubles. Contrary to the expectations of the Russian side, this decision is still running into very active resistance in the EU. But whether Gazprom is really ready to cut off gas supplies in the event that counterparties refuse the new payment scheme also remains unclear. Such a confrontation will only exacerbate the already gloomy prospects for shrinking demand for Russian gas in Europe, with the far from theoretical prospect of its complete drying up by 2030.

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