Can Russia solve the European gas crisis?
The current European energy crisis and huge market volatility are early indicators of imbalances in an accelerated energy transition scenario. The strategy of massive closure of nuclear and coal generation in Europe has led to an increase in the fragility of the entire energy system. The critical problem is the sharply increased dependence on external energy sources (LNG, pipeline gas) when there is no opportunity to significantly increase the supply from external sources.
Russia is one of the main beneficiaries of the current situation. This year, the value of Russian natural gas exports will be $60 bln vs $24 billion in 2020. In 2022 we expect it will approach $100 billion. However, by and large, the current situation is not the result of actions by Gazprom. For him, the crisis was an extremely fortunate circumstance. Gazprom is largely free rider but a mastermind of the crisis.
Russia has few realistic options to significantly increase gas supplies to EU. Current production is close to potential levels. Domestic demand continues to grow at a high rate. In winter, meeting domestic demand is a priority for Gazprom by law.
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