CEO of Crystol Energy, Dr Carole Nakhle, was quoted in the following BBC News article on why Russia is reducing its gas exports to Europe via the Nord Stream pipeline.
According to Dr Nakhle, the gas market is currently tight, therefore, any supply disruptions will further fuel the rise in gas prices. This could cause slowdowns in European economies and accelerate the route towards recession. She further adds that a country cannot build a dependence on gas from Russia and change its sources of supplies swiftly. That has been the case in Germany.
However, we should not underestimate the impact of high prices on demand. The German population is taking drastic measures to reduce their exposure to Russian cuts. For instance, they are buying wood stoves, installing solar panels and suspending short-term lets in order to reduce energy consumption.
Related Analysis
“Russia’s oil is in long-term decline – and the war has only added to the problem“, Dr Carole Nakhle, Jul 2022
“Energy Sanctions and the Global Economy: Mandated vs Unilateral Sanctions“, Christof Rühl, May 2022
“Sanctions and the Economic Consequences of Higher Oil Prices“, Christof Rühl, Apr 2022
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“OPEC, Oil Prices, and the US: Reasons for, and Solutions to, the Current Crisis“, Dr Carole Nakhle, Jun 2022
