According to analysts, rising tensions between Russia and Ukraine could cast a shadow over energy markets, and uncertainty could mean prolonged high gas prices in Europe.
“This is a very tight gas market … and there is no doubt that this imminent sense of crisis between Russia and Ukraine rests on the market, especially Russia, which supplies about 35% of Europe’s gas. “Because we are there,” said energy expert Dan Yagin. Monday’s CNBC.
If the crisis escalated, European gas prices, which soared to highs last year, could rise further, research firm Capital Economics warned in a weekend note.
William Jackson, chief economist at Emerging Markets for Capital Economics, noted that in addition to Europe’s dependence on Russia for gas, its current inventory supply is low.
“If Russia’s energy exports are sanctioned or if Russia uses gas exports as a leverage tool, Europe’s natural gas prices will probably rise,” he said.
This development has sparked speculation that Russia is preparing to invade the country, raising fears of repeated annexation of Moscow and repeated occupation of Crimea in 2014. Moscow has repeatedly denied these claims.
The Ukrainian Army Reserve, which holds a wooden replica of the Kalashnikov rifle, will participate in a military exercise near Kiev on December 25, 2021.
Sergei Spinski | AFP | Getty Images
Negotiations aimed at alleviating the crisis ended last week without a breakthrough.
US representatives and NATO members were born out of several days of high stakes discussions with high-ranking Russian officials. No solution – But there are warnings that the situation along the Ukrainian border is actually getting worse.
Imminent crisis caused the story U.S. may impose sanctions on Russia To prevent the Kremlin from invading Ukraine.
If that happens, according to Capital Economics, European gas prices will probably exceed the £ 180 per MWh peak seen late last year.
“And some states that are very dependent on Russia’s gas, especially in Eastern Europe, may be forced into distribution rights,” Jackson added.
The major gas crisis in Europe in the third quarter of last year European electricity prices soar to highs for the first time in years..
At present, Russia’s gas supply was already lower than normal, Jeffreys said in a Sunday memo.
According to the US investment bank, gas imports from Russia to Northwestern Europe during the August-December period fell 38% compared to the same period in 2018.
Europe’s gas reserves are also below average, down 21% from the five-year average as of January 12, the company said.
“We expect a protracted period of soaring natural gas prices,” said Jeffreys. “Gas flows from Russia are low as record lows in the heating season of 2021/22. There are up to. “
Yergin referred to the 2021 European gas crisis and said, “When the crisis began at the end of last year, I tended to say,’Oh, it’s a one-time event.’” , You could see this recurring. “
Russia-Ukraine crisis can cause higher European gas prices
Source link Russia-Ukraine crisis can cause higher European gas prices
The post Russia-Ukraine crisis can cause higher European gas prices appeared first on Eminetra.