Amid Ukraine tensions, oil traders bet on a deal with Iran

When it comes to Ukraine, worries about disruption focus on natural gas rather than oil. Reflecting tight markets and difficult geopolitics, gas prices in Europe are four times higher than they were a year ago, a situation that is putting pressure on households and businesses, such as producers. fertilizers and metal production, which are energy intensive.

About a third of Europe’s natural gas supply comes from Russia, largely through the pipeline network. Some analysts suspect that Russian President Vladimir Putin wants to cut off gas supplies to his most important customers, such as Germany and Italy, but pipelines through Ukraine could become collateral damage. of the fighting, and some analysts fear that Mr. Putin may continue to squeeze energy supplies in retaliation for sanctions imposed by the West.

Analysts believe that Europe can cope with short-term disruptions in gas supplies from Gazprom, Russia’s gas monopoly. Earlier this week, Ursula von der Leyen, President of the European Commission, said at great length, told reporters, “Our models now show that for partial disruption or further reduction in Gazprom’s gas supply, we are now on the safer side.”

But in the event of a longer cutback, Europe may need to take drastic measures. Such changes have occurred in today’s tight market.

The flow of liquefied natural gas, much of it from the United States, has outstripped Russian gas imports to Europe in recent weeks. If Moscow squeezes supplies further, Europe will likely ask other suppliers, such as Algeria, Azerbaijan and Norway, to increase flows, analysts say.

Europe could also take further measures, including restarting shale coal plants and delaying the scheduled closure of nuclear plants in Germany. Henning Gloystein, a director at Eurasia Group, said businesses could eventually be closed and, as a last resort, households could see their energy supply distributed.