No easy answers to Europe’s gas crisis
Europe’s gas crisis is a long way from over, with some analysts thinking that gas prices could remain twice as high as normal until 2025.

“The European energy crisis is not over yet,” said Goldman Sachs in a research note this week. The bank’s analysts think that gas prices could remain twice as high as normal until 2025. British wholesale gas prices, which are heavily influenced by Europe, are currently about four times higher than they were a year ago, at 218p a therm. An escalation in Ukraine could see prices top their highs of last December.
It might not come to that, says Bloomberg. Germany, which is highly dependent on Russian gas, has long argued that Moscow is a reliable supplier: it “kept sending gas to Europe all through the Cold War” and during the 2014 Crimean annexation. Russia is thought to be unlikely to want to damage that reputation. It is also economically dependent on the revenue from energy sales. Still, if the US throws Russia off the Swift payments system then energy transactions could become impossible. Nord Stream 2, a new energy pipeline to Germany that bypasses Ukraine, could be hit by new sanctions. Finally, a war could damage key Ukrainian pipelines that deliver gas to the West.
Liquefied natural gas (LNG) cargoes have been diverted from Asia to Europe in response to soaring prices, but LNG is no silver bullet, says Deutsche Welle. EU gas storage facilities are just 47% full, compared with a more normal level of 60% at this time of year, according to a report by Commerzbank. If Russian supplies are disrupted, “LNG would not be able to fully compensate”. There is “a lack of free short-term capacity among exporters such as the US and Qatar”. If things get very tight then governments may be forced to “ramp up coal power stations… environmentalists will not like that… but that really is the only possibility in the short term”.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
Tesco braces for supermarket price war with rival Asda
Tesco, Britain’s biggest grocer, has opted to cut its prices more quickly to prevent Asda grabbing market share
By Dr Matthew Partridge
-
Supersonic travel: How China could 'leapfrog' US and Europe's commercial aviation industry
Opinion Innovation in commercial aviation has been stuck for 60 years. A commercial supersonic jet might be back on the market soon, but will China get there first?
By Matthew Lynn
-
Why are energy bills so expensive in the UK?
Electricity bills in the UK are higher than in any comparable rich country. Some blame the net-zero zealotry of the government for that. What is really to blame for high energy bills?
By Simon Wilson
-
Solar investing: is it too risky?
NextEnergy Solar Fund’s steep discount reflects doubts about high debts and the sustainability of its dividend. What does it mean for solar investors?
By Bruce Packard
-
Why undersea cables are under threat – and how to protect them
Undersea cables power the internet and are vital to modern economies. They are now vulnerable
By Simon Wilson
-
Woodside Energy: an undervalued energy play
Woodside Energy offers a cheap way to invest in the growth of the global LNG market. Should you invest?
By Rupert Hargreaves
-
How businesses can cut energy costs and boost efficiency
Here's how small businesses can monitor energy costs even though they don't benefit from the Ofgem energy price cap.
By David Prosser
-
The nobbling of Britain’s nuclear energy sector
The UK once led the world in atomic power, but now it’s a has-been. The malaise is due to the left’s opposition to the sector and decisions taken by the Blair government.
By Max King
-
Look to space to fix the energy crisis
Solar energy from space and a type of helium on the Moon look promising.
By Merryn Somerset Webb
-
One day left for households to claim the £200 Alternative Fuels Payment to help with heating bills
Advice Households could be due a £200 payment if they heat their homes using alternative fuel sources and aren’t connected to the mains gas grid - but time is running out to claim the money. We explain what you need to know.
By Sue Hayward