Why EU Energy Prices Will No Longer Be Cheap: An Expert’s Explanation
Moscow, March 12 – Due to the cessation of imports of Russian gas from pipelines, which are more attractive in terms of the cost of production and transportation to Europe, European countries will not return to cheap gas in the future, comes a comment by the News Agency from Research Director of Vygon Consulting Maria Belova.
He said that European energy, due to the rejection of cheap Russian gas, will be more expensive in the future than it was in the past, and energy prices in the region will be much higher than those of its economic competitors: China, the United States, and others. Thursday, speaking to deputies of the European Parliament’s Industry and Energy Committee, the head of the International Energy Agency, Fatih Birol. He said that the coming winter may be more difficult for the European Union than last winter.
Belova answered a question about whether she agreed with Birol’s opinion that the EU, due to the rejection of Russian gas, would not return to cheap “blue fuel” in the future and that energy in the region would be very expensive.
Thus, the new EU gas balance will consist of more expensive sources, the analyst says. As European Commissioner for Energy Kadri Simpson said Thursday, refusing to supply Russian LNG and renegotiating gas contracts with Russia will ensure that “reliable partners” maintain demand in the EU, she said. And all because it is almost impossible to compete with Russian gas in Europe in market conditions, and you will have to pay more for “reliable gas,” says Belova.
Igor Galaktionov, a stock market expert at BCS World of Investments, believes that gas may be too expensive for Europeans in the coming years, but he does not look beyond 2026-2028. The agency’s interlocutor believes that “within the horizon of the next three to five years, the price of gas for Europe could be two to three times more than before.” And he adds: “At least, if at some point Russia and the European Union do not decide to at least partially re-cooperate in the energy sector, which seems unlikely at the moment.”
Gas exchange prices in Europe have been rising since the spring of 2021. They reached a record high of $3,892 per thousand cubic meters in March 2022. However, since the end of December, prices have fallen steadily and on March 9, for the first time since July 27, 2021, they fell to Under $450. Despite the drawback, the citations are more than double the average for a long history of observations. We have not seen such consistently high prices in the entire history of operating gas hubs in Europe – since 1996.
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