the situation on the gas market gives rise to optimism

Among the EU member states, the most vulnerable countries are Austria and Slovakia, which continue to import a significant amount of Russian gas through Ukraine. However, these countries are also starting to talk about new sources of gas supplies to mitigate the negative consequences in case gas transit is interrupted.

“Gazprom” will supply approximately 40 million cubic meters of gas per day through Ukraine in 2024. If such rates remain, then this volume will amount to 3.5% of the total gas demand of the European Union.

About half of this volume is delivered to Austria. The Austrian energy company OMV has announced that it has prepared for scenarios in which Russian gas supplies will be stopped.

A representative of the Slovak company SPP told Reuters that the company will continue to analyze the market situation and look for possible options.

“The possible scenario is that by completely losing access to Russian gas, Europe will be forced to look for other sources, and the most logical option will be liquefied natural gas,” says Rystad Energy representative Sindre Knutsone.

Data from the European Commission show that liquefied natural gas supplies from the USA in 2023 accounted for 14% of Europe’s total demand, but before the start of the war in Ukraine, this figure did not even exceed 4%. It is noted that the situation in the European gas market indicates that Europe is an attractive destination for American gas.

“Europe’s large reserves and growing LNG exports from the US cannot provide long-term protection against various risks, such as a ban on Russian LNG imports,” Energy Aspects spokesman Jake Horslen said. European Union countries have not yet imposed sanctions against the Russian pipeline or the liquefied natural gas on which Austria and Hungary depend.

Analysts predict that at the end of 2024, gas will cost 29-37.5 euros per megawatt hour. The current price is around 27.5 euros per MWh. Termination of gas transit through Ukraine can theoretically increase the price of gas by 10 euros/MWh.