Gazprom and European gas markets

An article in The Economist says European efforts to reduce Gazprom’s sway over gas prices have been partially successful. The proportion of Europe’s gas bought in the spot market has significantly risen. This has undermined Gazprom’s position. However, it is far too soon for Europe to declare victory. Gazprom will still deliver plenty of gas on long-term contracts. Though these will be based on the spot gas price rather than the oil price, its position as Europe’s marginal supplier will give it influence over spot prices - and hence on what its customers pay. Gazprom may have a say on European gas prices for years yet.

Saturday, January 4, 2014