His conspiracy Putin is failing. To pave the way for a war against Ukraine, Russian President Vladimir Putin began cutting natural gas supplies to Europe from the summer of 2021. Then he significantly reduced exports. natural gas to Europe from the Nord Stream 1 gas pipeline from June 2022. As a result, they turned out to be just … a drop compared to last year in September. However, his attempt to blackmail European countries to withdraw their firm support for Ukraine failed. Typically, the European Union imports about 40% of its natural gas from Russia. The shortage of Russian fuel sales and Europe’s desperate attempt to obtain liquefied natural gas at almost any cost in the run-up to winter led to a rapid increase in wholesale natural gas prices in August. But since then, the December 2023 futures contract, which we use as a barometer of the likely state of the natural gas market in the winter of 2023/2024, has gone downhill. and to eliminate the short-term impact of weather on spot market prices, fell to 85 euros per share. megawatt hour. Even though the average price of €20 is still four times higher than before early 2021, the gas price shock that pushed Europe into a winter recession appears to be easing. The risks of gas shortages have decreased.

With the help of warm weather and reduced consumption of natural gas in the EU. 20.1% below the norm between August and November 2022 the volume of natural gas stored in the EU. (% power) is now 13.4 percentage points above the norm for early January. It is clear that natural gas also matters. At the current rate of consumption, a sustained €100/MWh increase in the price of imported natural gas would cost EU members an additional €380 billion per year, a capital transfer to gas exporters equivalent to 2.4% of EU GDP. and 4.5% of final consumption. And since many natural gas imports are covered by long-term contracts, the actual increase in the natural gas import bill will be smaller. But even on that score, Germany was paying €100 per MWh more than the long-term average for gas imports from August to October 2022. Over time, less rising gas prices will ease the pressure on real disposable incomes and business profitability.

* Economists of Berenberg Bank.