The European Gas Market In The Current Geopolitical Context

The energy crisis caused by the Russian military invasion of Ukraine and by the subsequent sanctions, in particular the EU energy embargoes, marked a turning point for the global natural gas market and, in particular, for the European one. The growth rate of natural gas demand is expected to decline significantly in the medium term. This decrease follows a decade of strong expansion in which natural gas contributed about 40% to the growth of primary energy demand at the global level. While existing market tensions eased in the first three quarters of 2023, natural gas supplies remain relatively limited and prices continue to experience increased volatility, reflecting a stable balance in the natural gas market. High levels of storage in Europe have led the European authorities to a more optimistic estimate of energy security at the start of the 2023/24 winter season, but a number of risk factors could easily increase market tension. This article assesses, through a quantitative analysis, the developments of the EU gas market in the current geopolitical context, the effects of sanctions and EU measures to increase energy security. Our main conclusion is that, despite the decision of many Member States to reduce or even stop imports of natural gas from Russia, the EU does not face energy security risks due to the implemented measures