Answering the question on Nord Stream II and the role it has played in fuelling European gas prices, Dr Nakhle explained that Nord Stream II is a replica of Nord Stream I which, even before its inception, was a politically divisive pipeline. These pipelines are seen as increasing Europe’s dependence on Russian gas, thereby weakening the continent’s energy security especially when Russia is perceived as manipulating its gas supplies to Europe for political gains. However, Nord Stream II will not only increase the continent’s reliance on Russia, it will also enable Russia to significantly reduce its dependence on Ukraine which would subsequently suffer economically from the loss of transit fees.
Gas prices tend to increase during the winter season where demand on heating and electricity is relatively high. Energy prices and economic activity are highly correlated and today, more than ever, are fuelling inflation at a critical time of the economic recovery.
Of course, additional supplies from Russia would exhibit a downward pressure on energy prices but Russia is not the only solution. Higher prices are attracting additional supplies from the US, and elsewhere including Norway – a positive outcome of globalising gas markets thanks to LNG.
“European gas crunch: Calm before the storm?“, Dr Carole Nakhle, Dec 2021
“European gas crisis – the new normal“, Dr Carole Nakhle, Nov 2021
“Oil markets: What crisis?“, Dr Carole Nakhle, Nov 2021
“An Energy Crisis Like No Other“, Lord Howell, Oct 2021
“Record surge in European gas prices“, Dr Carole Nakhle, Dec 2021
“Major risks for energy markets in 2022“, Dr Carole Nakhke, Dec 2021
“Germany suspends certification of Nord Stream II“, Christof Rühl, Nov 2021
“Natural gas crisis – why prices are soaring“, Dr Carole Nakhle, Sep 2021