/cloudfront-eu-central-1.images.arcpublishing.com/prisa/MN66YGPQPRILE3TOGBKUQ35FWI.jpg "Europe can now live without Russian gas, but it still does not dare |")
On April 7, 2022, a few weeks following Vladimir Putin’s first bombings on Ukraine, the European Union activated the first sanctions on a Russian fossil fuel: coal. At that time, there were still fears that a total embargo on crude oil from the Eurasian giant would unclog the thunderclap and end up being unmanageable, both from the point of view of supply and from that of prices. These fears ended up being overcome only a few months later: at the end of the year, the Twenty-Seven already had the first retaliations in force once morest anyone who dared to import crude oil from that country.
Today, two years following the invasion, Europe seems perfectly prepared to take the next step, the one that seemed even more complicated – “impossible”, many said – and that today seems much more manageable: ending once and for all with the gas imports from Russia, which throughout this time have helped the Kremlin finance its war campaign.
“It would be possible [no importar gas ruso]”, points out Thierry Bros, professor at Sciences Po Paris and a deep expert on the gas market. “But that is not what the market is doing at the moment: following a 40% year-on-year increase in January, Gazprom continues to send more gas to the EU in February.” With the arrival of more Russian liquefied natural gas (LNG) to the EU – which in the first two months of 2024 grows by 7% compared to the same period of the previous year and which has Spain, France and Belgium as the three main entry points to the community space—“the share of Russian gas in EU demand should exceed the historical minimum of 15% reached in 2023.” The rebound in Russian gas in 2024, maintains the French academic, “is not going in the right direction, even if it helps resolve the unbearable cost of the energy crisis.”
Oversupply and low prices
Market observers believe, in fact, that the price pendulum has swung just to the opposite extreme: that of “oversupply.” This change is also felt in prices, infinitely lower than a year and a half ago, when the European market broke all the molds. In this context, there are those who, even in the European Commission itself, are considering taking the step of dispensing with Russian gas, while regretting the lack of decision on this point. “The most solid solution is to include it in the sanctions, but the leaders do not have unanimity on the matter,” Kadri Simson, the Energy Commissioner, said this week.
Bros sees, above all, two factors that inhibit action. First, Russian gas, both by tube and by ship (the so-called LNG), is notably cheaper than the rest. Second, that both Austria, Hungary and Slovakia – the first, a clear ally of Putin in the EU; the second, at least reluctant to provide more aid to Ukraine—are making huge profits from that cheaper gas. “That makes sanction impossible, because unanimity is needed.”
Without the iconic and strategic Nord Stream, following its explosion in September 2022, and without flow through the Yamal gas pipeline (through Belarus), Russian gas reaches the EU today in three ways: by sea, the most popular route and difficult to plug; by tube through Türkiye; or, also by pipeline, through Ukraine. The latter is the most paradoxical of all, since the same fuel that supplies Moscow with money flows under the very country that is suffering the invasion.
Closing all those routes is something that seems quite acceptable in the new the status quo energy of the Old Continent. First, because the regasification capacity, necessary to be able to receive and process the liquefied gas that arrives by ship, has grown significantly compared to before the energy crisis and allows gas to be brought from practically any corner of the world: from the United States to Qatar, Australia to Trinidad and Tobago. Second, because demand has fallen sharply since then and a substantial part (although for now unquantified) of this lower consumption will be structural. And third, because the current storage level of the Twenty-seven is the highest in the historical series for the month of March and allows us to think regarding a refilling season (spring and summer) much less intense than in previous years.
The impact on prices in this scenario would be minimal, Bros ditch: “There would not be many consequences [sobre las cotizaciones del gas] because we have plenty of gas, although the market may be more rigid for next winter.”
Follow all the international information on Facebook y Xor our weekly newsletter.
to continue reading
_
