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The European energy crisis and the consequences for the global natural gas market

Author

Listed:
  • Simone Emiliozzi

    (Bank of Italy)

  • Fabrizio Ferriani

    (Bank of Italy)

  • Andrea Gazzani

    (Bank of Italy)

Abstract

The Russian invasion of Ukraine in February 2022 led to severe disruptions in the European gas market, with significant repercussions on a global scale. The conflict caused a surge in energy prices, a major reshuffling of global natural gas flows, and a shift in the policy-makers' agendas towards energy supply security. This paper describes the global gas market and analyses the consequences of the war, focusing in particular on the European gas market and on global LNG trade flows. We first review the characteristics of the gas market in terms of both pricing benchmarks and contractual terms. Next, we analyse the changes to LNG and natural gas production, consumption, and trade flows throughout the 2022-23 energy crisis. Finally, we review the main policy response to the energy crisis and present some considerations on the gas market outlook.

Suggested Citation

  • Simone Emiliozzi & Fabrizio Ferriani & Andrea Gazzani, 2023. "The European energy crisis and the consequences for the global natural gas market," Questioni di Economia e Finanza (Occasional Papers) 824, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_824_23
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    References listed on IDEAS

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    More about this item

    Keywords

    natural gas; energy crisis; LNG; fragmentation;
    All these keywords.

    JEL classification:

    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources

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