The expert predicted a rise in gas prices in Europe in case of abandonment of Russian LNG

Europe's rejection of Russian liquefied natural gas (LNG) could lead to a significant increase in energy prices and complicate the situation on the European market. Igor Yushkov, a leading analyst at the National Energy Security Fund, an expert and lecturer at the Financial University under the Government of the Russian Federation, told Izvestia on March 17, noting that Russia is the second largest supplier of LNG to Europe after the United States.

Earlier in the day, Politico reported that in February, the European Union (EU) decided not to impose sanctions on Russian liquefied natural gas. This is due to the fact that Brussels hopes to first coordinate the supply of American LNG with Washington.

"For many countries, Russia is the largest supplier of LNG. Although it's hard to say exactly where he's going. For example, in Spain, gas is most often consumed on the domestic market, while in the Netherlands, France and Belgium it is regasified and supplied to other countries through pipelines, for example, to Germany," the expert explained.

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Yushkov stressed that abandoning Russian LNG would require finding alternative suppliers, which would increase costs.

"To replace Russian gas, Europe will have to reorient supplies from Qatar, which is currently shipping its volumes to Asia. This will cost significantly more, especially given the new risks associated with tensions in Yemen and the threat of attacks on ships. We will have to pay more for gas to be delivered through the Cape of Good Hope," the expert noted.

The expert also drew attention to the fact that the abandonment of Russian LNG could lead to higher prices not only for liquefied natural gas, but also for pipeline gas.

"Prices on the stock exchange will rise, and they are linked to all types of gas. This will hit European consumers," he added.

The expert also pointed out that the Yamal-LNG project occupies a leading position in the European liquefied natural gas market. He added that the imposition of sanctions against Russian LNG could have unfavorable consequences for Europe itself.

"Russia as a state will only benefit from such sanctions. <...> The Yamal-LNG project has tax benefits, and the state receives the main profit from pipeline gas. If gas prices rise, Russia will earn more through export duties. I think Europe understands that this is pointless and they are striking solely at themselves," Yushkov summed up.

On March 5, Igbal Guliyev, deputy director of the MGIMO International Institute of Energy Policy and Diplomacy, told Izvestia about the prospects for gas supplies to the EU via the Turkish Stream. According to him, the Turkish Stream, launched in 2020, became the most important link for Russian gas supplies to the European market after Ukraine refused to extend the transit agreement. The pipeline includes two branches, each with a capacity of 15.75 billion cubic meters of gas per year.