Her games and threats Russia with flows natural gas increase the risk of a complete cessation of supply Europeturning the worst-case scenario for the European economy into the now basic one, which will lead to a new jump in natural gas prices and electricityaccording to analysts.

After the G7 announced a ceiling on oil prices, tensions between Russia and the EU eased. and the United States escalated even more, according to international agencies, with Gazprom announce an indefinite closure Nord Stream 1 and Moscow is threatening that gas supplies to Europe will not fully resume until the West lifts sanctions.

Wood estimates that if gas cuts continue forever, it will push Europe towards a negative scenario of a 3.5% recession in 2023 after a weak growth of 2.3% this year, and inflation will jump from 9% this year to 10.8 % in 2023 on average. For Greece, according to Wood, the shock will be strong: a 2.6% recession in 2023 from 5% growth this year, with inflation averaging 9% from 12% this year, while the current account deficit transactions will remain at the level of 7%-7.5. % both years.

For now, Wood notes, it looks like Russia will continue to “turn on and off” natural gas supplies in the coming months, but it is very likely that the situation will worsen with a final shutdown of supplies in the winter.

If gas cuts continue, Wood predicts a 3.5% recession in 2023 in Europe.

From the side Morgan Stanley assesses that its base case now is that flows through Nord Stream 1 will not continue and Europe, although it will not need to exercise the energy voucher this winter, will enter winter 2023/2024 with unusually low levels of inventories; a cumulative lack of 30 cubic meters per day over the next 12 months will place a significant strain on stocks. As a result, the US bank estimates that electricity prices will increase by 100-400%, and natural gas will also see another strong rally.

“The extreme scenario of a complete shutdown of Nord Stream 1 has become mainstream at this stage,” JP Morgan emphasizes at the same time in a new analysis. According to him, new changes in the flows and attitude of Russia will lead to further growth in prices for natural gas and electricity in Europe and extensive interventions in the European electricity and natural gas markets. “Complete winter shutdown is now certain,” he warns. European storage may already be 81.6% full, but the prospect of a total shutdown of Russian gas supplies in the coming months and this winter is likely to put additional pressure on an already very tight European gas market, JP Morgan notes. Even at full capacity, European gas reserves typically provide only about 25% of annual demand, he said.

However, JP Morgan expects wide-ranging interventions in the European energy market, which could include price caps on electricity and natural gas, as well as a mandatory reduction in the use of natural gas in non-essential industries.