4,000 dollars per 1,000 cubic meters of gas – these are the prices that the Russian company Gazprom expects to pay in the winter. According to the state-owned company, the reason for this is the sanctions imposed by the West, which are expected to hamper exports and production.
The Russian state-owned company Gazprom warns its European customers of sharply rising gas prices in the winter. These could increase by 60 percent to more than 4000 dollars per 1000 cubic meters, as the company announced in Moscow. The reason for this is that exports and production continue to shrink due to Western sanctions because of the Ukraine war.
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“European spot gas prices have reached $2500 (per 1000 cubic meters),” Gazprom said. “According to conservative estimates, prices will exceed $4000 per 1000 cubic meters this winter if this trend continues.” Ukraine has closed one of Gazprom’s routes for deliveries to Europe. The group itself has cut its capacity on the Nord Stream 1 Baltic Sea pipeline to Germany to about 20 percent in a dispute over a gas turbine owned by Siemens Energy, the German company responsible for its maintenance.
Overall, Gazprom’s gas exports slumped 36.2 percent to 78.5 billion cubic meters between Jan. 1 and Aug. 15. Production simultaneously decreased by 13.2 percent to 274.8 billion cubic meters, the company said. In August alone, production so far fell 32.2 percent, down from 35.8 percent in July, said economist Yevgeny Suvorov of CentroCreditBank. The decline in exports accelerated to 59 percent, he said.
Dutch wholesale gas prices reached a record high of nearly 335 euros per megawatt-hour (MWh) in the spring. Since then, they have fallen to around 226 euros. But they are still far higher than a year ago, when they were around 46 euros per MWh. In Germany and many other European countries, high energy prices are fueling inflation. According to experts, the German inflation rate could even reach double digits in the fall.