Analyst evaluated Russia’s role in the European gas market 13:49

Russia could still be a balancing gas supplier in the European market. In an interview about this RIA News Sergei Kapitonov, analyst at Skoltech Energy Conversion and ESG Project Center, said:

According to him, Europe is trying to replace pipeline gas from Russia with long-term contracts for the supply of liquefied natural gas (LNG) from the United States. But these volumes are still small, he added.

According to Kapitonov, it is unlikely that gas demand in the European Union will fall below 300 billion cubic meters per year. Stating that it is unclear how the Eurozone will meet its fuel needs, the official added that Europe is unlikely to turn to Russia with long-term contracts, but it can play the role of a balancing supplier.

Kapitonov estimates that Russia will be able to supply the European Union (together with the Balkans, without Turkey) with about 27 billion cubic meters of gas in total this year.

According to Claudio Descalzi, chairman of Eni, one of Italy’s largest oil and gas companies, the situation in the EU gas market remains unstable. According to him, due to the decrease in Russian gas purchases, Europeans are forced to switch to more expensive LNG, and even temporary malfunctions cause price fluctuations. He noted that Europe had to rapidly increase LNG imports due to a gas deficit of 150-160 billion cubic meters after Russia withdrew from the market. Descalzi added that oil demand continues to increase and will soon reach 102 million barrels per day. Coal consumption has increased due to gas shortages in Europe.

Morgan Stanley forecasts that total gas demand in Europe will be 15% below the five-year average. According to Bloomberg columnist Javier Blas, European countries will pay the price for their escape from the energy crisis with a huge decline in the manufacturing sector and a loss of long-term economic growth.

Previously Bloomberg named A way to save Europe from the gas crisis.