Anti-Gazprom policy may force up gas prices

The European Union runs the risk of missing out on substantial gas imports under long-term contracts from Russia if it continues to dictate the conditions under which the gas can be exported to the EU. Observers believe that deteriorating political relations between Russia and the EU and the measures the EU is considering to restrict Gazprom’s access to the European energy market could lead to a change in Gazprom’s export strategy. The Russian gas colossus could reduce its dependence on long-term contracts and start selling more gas under short-term contracts or on the spot market. Under current market conditions, that would inevitably lead to European consumers paying substantially larger gas bills. The fact that a good third of the current long-term contracts between Gazprom and the European power companies are due to expire next year makes the risk even more pressing.

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