Gas Will Stay High Even After the Spat With Russia

When the European energy crisis started in mid-2021, Brussels bet the upheaval would be largely gone by spring. As it became obvious that wasn’t going to happen, it speculated the problems wouldn’t last beyond 2022. That wager looks to be off, too. Away from the daily gyrations of European spot natural gas prices — swinging between worries about a potential Russian invasion Ukraine and the effects of mild winter — the forward market has begun to price trouble in 2023, 2024 and beyond.

Europe imports approximately 40% of it gas from Russia, and if a war — one that Moscow says it does not intend to launch — led to the loss of all those supplies, the region would be forced to take draconian measures, including shutting large swathes of its energy-intensive industry. European gas prices would spike multiple times higher than the record high set in December.