OIES Podcast Series: Impact of Russia-Ukraine War on Energy Markets Series – 19

In this latest OIES podcast James Henderson talks to Mike Fulwood, Jack Sharples and Jonathan Stern about the current state of gas supply in Europe and about the reaction of the EU and some European countries to the current high prices as we head towards winter. We review the current flows of pipeline gas into Europe and look at LNG imports and send-out to the European market, before updating the storage situation and the increasing tightness of the market. The majority of the podcast, though, is spent discussing EU plans for a price cap in the wholesale market and the relevance of the TTF benchmark. We debate whether TTF can be sustained as a relevant benchmark providing useful price signals – we argue that it can and should – before looking at alternative means to negotiate with suppliers for lower prices during the winter of 2022/23. We discuss how negotiations could take place with supplies of pipeline gas and LNG and who the most important players might be on the European side, pondering the idea of a single buyer and the role of Transmission System Operators (TSOs) in the management of prices. We also consider what the longer-term implications for the European market might be, and summarise our views on what the best, and worst, outcomes might be.