Gazprom predicts gas price increase to $4,000 per thousand cubic meters

Russian state gas company Gazprom said today that gas prices in Europe could rise another 60%, to more than $4,000 per 1,000 cubic meters this winter, as the state company’s exports and production continue to decline due to Western sanctions.

Gas flow from Russia has dwindled this year after the closure of one pipeline from Kyiv following Moscow’s invasion of Ukraine in February and a dispute over parts of the Nord Stream 1 pipeline’s equipment, pushing gas prices up.

“European spot prices have reached $4,000 per 1,000 cubic meters. According to conservative estimates, if this trend continues, prices will exceed $4,000 per 1,000 cubic meters,” Gazprom warns.

In the spring, the wholesale price on the Dutch spot market reached 335 euros per megawatt hour (MWh), a record high. It has since dropped to €226/MWh but remains at a much higher level than at the same time last year when it was €46/MWh.

Kyiv closed one of Gazprom’s export routes to Europe, and Gazprom cut the flow to 20% of the capacity of the Nord Stream 1 gas pipeline to Germany due to a dispute over gas turbineunder sanctions.

In general, Gazprom’s exports from January 1 to August 15 decreased by 36.2%, to 78.5 billion cubic meters, while production fell by 13.2%, to 274.8 billion cubic meters compared to the level of the same period last year, the Russian state-owned company said in a statement.

In August, Gazprom’s production fell by 32.2% compared to 35.8% in July year on year, Evgeny Suvorov, an economist at CentroCreditBank, said on the MMI Telegram channel, adding that exports fell by 59% compared to 58.4% last month.

At the same time, Russia received an income of about $100 billion, which is twice as much as in the same period in 2021.

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