Bloomberg analysts note that the rapid depletion of gas reserves by EU countries and problems with supplies from Russia create the prerequisites for a new gas crisis in Europe.
Points of attention
- The rapid depletion of gas reserves and supply issues from Russia are creating the prerequisites for a new energy crisis in the EU.
- Increased demand for gas due to cold weather and drought is leading to a rapid decrease in gas reserves in Europe.
- A possible suspension of Russian gas supplies through Ukraine could deepen the energy crisis in the EU, affecting sectors like automotive, chemical, and engineering in energy-intensive countries like Germany.
- Analysts recommend that EU countries secure sufficient gas reserves to prepare for potential disruptions in gas transit through Ukraine in the future.
- The EU faces challenges in managing gas reserves amidst rising prices and competitive pressures, as European countries brace for a possible termination of Russian gas supplies through Ukraine.
What is known about the beginning of a new gas crisis in the EU
The article emphasizes that due to the continuation of the criminal war unleashed by the Kremlin against Ukraine, gas prices in Europe have increased by 45% this year.
It is noted that the level of gas prices on the European market is currently lower than the record figures of 2022, but it is high enough to increase the household crisis and competitive pressure on manufacturers, who are already experiencing significant difficulties.
This year, European gas reserves are rapidly dwindling due to increased demand amid cold weather, and the drought has forced companies to burn more gas to generate electricity.
We still have problems with gas supplies. If we really want to be independent from Russian gas, we need more imported capacity, and we will probably see that again this winter, because gas storages are being emptied quite quickly, as the start of the winter will be cold, says RWE AG CEO Markus Krebber .
Despite the fact that the EU has significantly reduced the supply of Russian gas, the loss of one of the last supply routes leads to greater pressure on the gas market and provokes a sharp rise in world prices.
Europe is already preparing for a possible termination of Russian gas supplies through Ukraine at the end of the year.
In addition, gas prices in the EU in summer turned out to be more expensive than gas prices for the following winter.
This indicates that the price of electricity will remain high for a long time, and the lower the level of reserves in storage in winter, the more difficult it will be to replenish reserves.
What analysts say
This resembles the scenario of 2022, when the EU bought gas at any price. This may happen again next year as well, — warns Arne Lohmann Rasmussen, chief analyst of Global Risk Management.
At the same time, the executive director of the International Energy Agency, Fatih Birol, warns of the need for EU countries to provide themselves with sufficient gas reserves until the end of winter in the event that Russia stops transit through Ukraine on January 1, 2025.
And once again, energy-intensive countries, led by Germany, will be the most affected, which will harm the economy, which is already experiencing problems in the automotive, chemical and machine-building sectors, says Ole Hansen, head of commodity strategy at Saxo Bank AS.
