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Demand for Russian Gas Grows in Europe

by in Business, Economy

Europe has spent many years reducing its dependence on Russian gas. However, with the expected cold next winter, it will need more fuel than usual.

Natural gas supplies in Europe have been reduced to a 10-year minimum, and as Citigroup forecasts, it will reach the lowest level in five years. Filling gas pipelines is connected to difficulties as large quantities of liquefied natural gas go to China today and Norway’s gas processing industry will not be able to return to its pre-pandemic state for a long time.

Because of all this, Europe has become even more dependent on Russian gas, and this is when Russia is reducing its transit to Ukraine. Therefore, the North Stream-2 pipeline is becoming particularly important.

If according to the plan, the “North Stream” starts operating in September, it will supply Europe with an additional 8 billion cubic meters of gas, and after 2 months, the supply may increase dramatically.

The construction of North Stream-2 was almost completed after the Biden administration decided to impose serious sanctions on the project and suspend the project.

Some traders are convinced that Russia will try to supply gas to Germany through North Stream-2 before the elections – the reason is that the strengthening of the position of the Green Party as a result of the elections may make it difficult for Moscow to obtain permits.

The pipeline and Russia will face many difficulties – North Stream-2 will have to obtain lots of permits, licenses, and certificates for commercial activities in the EU. Therefore, the Kremlin does not need any additional problems from the strengthened “Green Party”.

“Today we are at a stage of fairly tense balance between supply and demand for gas, and if this tension continues and the winter is going to be cold, we will see a significant rise in prices,” said one of the shareholders of North Stream-2. He said North Stream-2 would have a significant impact on the gas market in the short term, as fuel supplies to Europe were severely reduced.