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Gasprom Stimulated Gas Price Increase in Europe

by in Business, Economy

Gazprom is refusing to increase gas supplies to Europe via Ukraine, which has led to a sharp increase in fuel prices.

According to analysts, following the low gas reserves and rising consumption in Asia, stabilizing gas prices are not expected in the near future, and Gazprom’s tough approach to Ukrainian transit will further complicate the market situation.

At the same time, the supply of liquefied natural gas to Europe is declining – from the beginning of July, the number is 22% lower than in the same period in 2020. All liquefied natural gas is flowing to Asia, where energy consumption is rising sharply amid hot weather and economic prosperity.

According to Platts Analytics, in the third quarter of 2021, gas consumption in Western Europe will decrease compared to today, although the decline in prices will begin only after the launch of “North Stream-2” – commercial gas supply through this pipeline is expected to begin in October.

Gazprom has set its average annual export price at $ 240 for 2021, while Russian liquefied natural gas producer Novatek has set it at $ 24. According to Novatek, in the second quarter of 2021, the cost of gas sales increased by 41%, while the average annual profit of the company increased by 139%.

According to experts, if the price of gas in Asia does not rise sharply and at the same time, Gazprom has not changed its approach to Ukrainian transit, low prices on gas are not expected before the end of the year.

Current trends – rising consumption, insufficient stockpiles, and declining liquefied natural gas imports to Europe – are not reducing prices.

By the end of the year, the price of Russian gas in the European market is expected to be 460-480 dollars, then, after a slight stagnation, prices will begin to fall in winter.

However, this is only if the winters in Europe will not be particularly cold, which has been happening more and more frequently in recent times.

In case of cold weather, the demand for gas in Europe and prices will increase.