Home » Markets » Russia offered to pump more gas to Europe. But analysts doubt that's ever going to happen
Russia offered to pump more gas to Europe. But analysts doubt that's ever going to happen
Europe is experiencing an energy crisis with bumper demand and limited supply prompting a squeeze on gas prices in the region.
Russian President Vladimir Putin stepped in on Wednesday, offering to increase Russia's gas supplies to Europe.
Analysts doubt that Russia can, and will, deliver on that offer.
LONDON — Winter isn't even upon us yet and Europe is already experiencing a gas market crisis with bumper demand and limited supply, prompting a squeeze on prices in the region.
So when Russian President Vladimir Putin stepped in on Wednesday, offering to increase Russia's gas supplies to Europe, regional gas prices (up a staggering 500% so far this year) fell and markets breathed a sigh of relief.
Market analysts quickly suspected that the offer to increase supplies to Europe was likely intended to put pressure on Germany to certify the Nord Stream 2 gas pipeline (which will take Russian gas supplies to Germany via the Baltic Sea) for use, as Russia is waiting on Germany's energy regulator to authorize the $11 billion pipeline, a process that could take several months.
Experts warned that Russia's offer demonstrated that Europe is increasingly vulnerable to Moscow's ability to turn on — and off, more importantly — gas supplies as and when it wants.
While Russia's apparent largesse might have offered gas markets some respite, analysts have since noted that Russia might not even be able to deliver on promises to supply more.
"Comments from Mr. Putin appear to have provided some comfort to the market. However, whether these additional gas supplies depend on a quick approval of Nord Stream 2 or not may not be the main issue," Adeline Van Houtte, Europe analyst at the Economist Intelligence Unit, said in a note Thursday.