Economist names conditions for even higher gas prices in Europe

Today, a number of factors influence the growth of gas prices in Europe, but if the countries decide to restore some chemical and metallurgical production facilities, it will lead to an even greater increase in the cost of fuel. Stanislav Mitrakhovich, a leading expert of the National Energy Security Fund and the Financial University under the Government of the Russian Federation, told Izvestia on November 25.

According to him, the European Union (EU) made a decision regarding the reduction of gas supplies from Russia based on the idea that "something has to be sacrificed," and this is what happened.

"First, the EU sacrificed part of its revenues because they switched to liquefied natural gas. Second, they sacrificed part of their energy-intensive, chemical and metallurgical industries," he explained.

Mitrakhovich noted that there are still factors that the EU has no control over, such as the weather. If it is cold, it will affect the level of consumption. Also, Europe is not able to control the demand for gas in other regions, as the LNG market is integrated. If demand grows in one part of the world, it means that less resource may reach the EU, the economist said.

The expert pointed out that the EU cannot control the situation with gas suppliers, for example, in the Middle East, because in the case of them there are also certain risks.

"Everything together provokes price growth in Europe. And the more so the price rise will go up if they try to restore part of chemical and metallurgical production," Mitrakhovich added.

Next suspension: gas in Europe could double in price in winter

Why the fuel market is feverish and whether Europe will be able to do without Russian supplies

Earlier, on November 23, Bloomberg reported that Europe is threatened by a new gas crisis. One of the key factors that may contribute to a further increase in prices for the resource in the near future is the cessation of pipeline gas supplies from Russia, which is still purchased by a number of European countries, the article specified. In addition, delays in the supply of liquefied natural gas from the United States and cold weather during the winter period may also contribute to the increase in cost.

On the same day, Deputy Chairman of the Russian Security Council Dmitry Medvedev said that residents of European countries are freezing because of the cessation of Russian gas supplies to European countries.

Back in October, Gazprom CEO Alexei Miller said at a plenary session of the St. Petersburg International Gas Forum that Europe's policy on the gas market could lead to a new gas price shock and supply disruptions. He called the situation on the European gas market bad and agreed with the assessment that the demand for energy resources there is being destroyed purposefully.