Russian gas to the EU: to sanction or not to sanction
The gas market in Europe is in a state of real uncertainty as to whether Russia will cut off gas supplies to Europe, or whether the EU should sanction imports of gas on the grounds that their payments are fuelling the Russian war machine in Ukraine. The current situation of uncertainty and not knowing whether flows from Russia will be curtailed is the worst of all worlds, and is keeping prices high and, as a consequence, keeping Russian revenues from gas at record levels. The EU has a binary choice – full sanctions on Russian gas with an immediate impact on revenues or a clear statement that contracts will be fully abided by and contract volumes will continue to be nominated, increasing supply and significantly reducing prices – and revenues – to Russia. The latter course of action would not remove the uncertainty that Russia may choose to curtail flows, but it would at least provide certainty to the market from the perspective of the EU and European buyers.
Read OIES' commentary on this topic here.
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