Experts reckon that a launch of the Nord Stream pipeline will moderate gas prices in Europe.  

Once Russian suppliers are allowed to export natural gas under the Baltic Sea to the EU, prices will go down immediately. Analysts believe that the pipeline will be available for commercial gas exports before the EU energy authorities issue the long-awaited certificate. Currently, the EU desperately needs a vast amount of liquefied natural gas. Managing partner at WMT Consult Ekaterina Kosareva thinks that the news on the progress in the approval of Nord Stream 2 has a major impact on the energy market. According to the expert, as soon as the pipeline is launched and operates at full capacity, gas prices will plunge to $500 per 1,000 m3.           

Alexey Grivach, Deputy Director of the National Energy Security Fund, predicts that an earlier launch of the gas pipeline will enable European energy providers to bring down gas prices in less than no time. LNG prices have gyrated in a wide range over the last two years. Experts warn that such market turbulence will persist in 2022-2023.

The shortage of natural gas is caused by two main catalysts: severe frost and force majeure circumstances that might hit the EU in the winter. In times of adversity, gas futures trade at elevated levels. Energy analysts foresee a sharp upward correction in gas prices. When the correction is over, LNG futures will drop to the pre-pandemic levels.

Ahead of New Year’s Eve, gas prices made a sharp retracement in the EU, trading below $1,000 per m3 for the first time since early December 2021. Gas prices in European futures markets sank by 10% on December 30.