Natural gas futures at 13-year highs in the US
The possibility that the European Union and other nations, such as Japan, will apply additional measures against imports of Russian energy products - not just coal - is putting pressure on oil and gas prices. US natural gas futures hit a new 13-and-a-half year high on Monday, trading at more than $7.55 per million British thermal units.
Tensions due to the war in Ukraine are joined by other factors; such as declining production and various operational problems in pipelines, including those operating in New Mexico. However, the central issue focuses on the concern regarding the recovery of acceptable levels of gas inventories in Europe. This issue also adds to the increase in exports of Liquefied Natural Gas (LNG) by the United States, which have reached a historic figure. An example of this is that it has become the main supplier of this hydrocarbon to Spain.
Germany, however, as well as Hungary, are acting as a brake on the alternative of extending embargoes to Russia. Expert opinion stresses that a drastic reduction in purchases of Russian gas and crude oil would have a very negative impact on the country led by Olaf Scholz.
While Europe is on average 40% dependent on Russian gas, the weight of the hydrocarbon supplied by Gazprom is almost 60% in Germany's case. Nevertheless, Berlin has opted for the nationalisation of the Russian giant's subsidiary in its country. Gazprom Germania controlled the infrastructures that store gas reserves, which has been seen as a first step towards reducing dependence on Siberian fields.
In this context, Russian President Vladimir Putin has stated that there is currently no alternative for his country's gas in the face of the possibility that Europe and its allies might impose an embargo on this raw material. At a meeting on the situation in Russia's oil and gas sectors, he also stressed that replacing Russian energy resources with alternative supplies will affect the entire global economy. "Supplies from other countries, mainly from the United States that can be shipped to Europe, will be more expensive," he added.
Meanwhile, Italian Prime Minister Mario Draghi said the proposal to cap gas prices is gaining support in the European Union and will be discussed at the next European Council.
