News

Analyst assesses Medvedev’s natural gas price forecast

Deputy Head of Russia’s Security Council Dmitry Medvedev predicted an even sharper rise of gas prices in Europe, possibly to $4K by the end of the year, while suggesting on his Telegram channel that German Chancellor Olaf Scholz was the only person in the region who could afford to spend enough time in the shower now.


Dmitry Medvedev, Deputy Head of Russia’s Security Council. Ramil Sitdikov / RIA Novosti

As of 2 pm on August 22, natural gas surged above $3K ($3,006 per 1,000 cubic meters) at the Netherlands hub, when the heating season has not even started yet in the EU. However, countries are frantically filling their storage facilities, head of analytics at AMarkets Artyom Deyev explains.

Russia, which is the main supplier of gas to Europe (with a share of 30%), will discontinue supplies via Nord Stream due to a three-day scheduled maintenance of the only remaining turbine from August 31. This news alone drove gas prices up $500 in the morning, the expert told Invest Foresight.

“What can we expect in a situation where Europe will face a physical shortage of gas and a cold winter? It can exceed $4K, and $5K, even though this might seem impossible now,” the analyst notes. “The same thing happened a year ago, when no one expected gas to reach $3.5K per 1,000 cubic meters, but it happened. Gas shortages, supplies falling short of the usual levels, and failure to replace Russian gas with other options fast enough – all this leads to dramatic price fluctuations, which have been continuously growing for six months.”

According to the expert, this process is unlikely to stop until either Nord Stream is back to its pre-crisis traffic, or Nord Stream 2 is up and running.

“Time will tell. But prices in Europe will remain high unless Russian gas pipelines resume normal operation. For the EU, this means a severe energy crisis and the collapse of the entire economic system,” Artyom Deyev sums up.

Previous ArticleNext Article