Gas prices: Russia under the close supervision of Europe

volatility in the gas market

Threats of sanctions against Russia announced by the US and Europe could again cause volatility in the gas market in the short term, while it fell sharply after the Russian decision

Russian gas exports to Europe account for 40% of demand within the Union, and too much pressure from the latter on Putin could exacerbate the current energy crisis, which has already caused gas prices to skyrocket in recent months.

Risks on the border with Ukraine worry Europe

Indeed, the European Union is closely following the development of the situation on the border between Russia and Ukraine, as thousands of troops are gradually being drawn into the region. According to some reports, Russia may invade Ukraine as early as January.

These troop movements are worrying European leaders, who are trying to warn Russia that an invasion will lead to severe repression, both economically and geopolitically. However, the question of a military response does not seem to be worth it.

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Nord Stream 2 as a means of pressure on Putin?

Nord Stream 2, a second gas pipeline built along the same route as the first, will double Russia's throughput in the North Sea. On the other hand, this would reduce the use of the pipeline passing through the countries of Eastern Europe, with the ensuing economic consequences for the latter, but would also increase Europe's energy dependence on Russia.

Thus, the need of the countries of the old continent for international gas can be significantly reduced, especially from the United States, which is one of the largest gas exporters in the world. This may explain the pressure that the first world power is currently exerting on Europe and Russia.

Regarding the commissioning of Nord Stream 2, Germany warned that it would depend on Russia's behavior towards Ukraine and that it could in no case intervene until July 2022.

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Gas prices in Europe will correct in the short term

Gas prices in Europe fell sharply last night after new supplies from Russia were loaded, but the medium-term outlook remains favorable for further gains.

Indeed, colder weather forecasts than historical averages, as well as tensions with Russia, may subsequently contribute to the return of the bullish trend. Thus, despite the recent decline in gas prices in Europe, we expect them to continue to rise against the backdrop of lower temperatures, but above all the situation in relations between Russia and Ukraine and the reaction of the European Union and the United States to Vladimir Putin.< /p>


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