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Without Russian gas, we will certainly not endure the winter of 2023-24, and it is not yet clear where Europe will find the missing supplies, energy expert András György Deák told Index in connection with the sanctions.
The world gas price could be as high as €235 next summer. But experts believe the market will not stabilize before 2024, Index writes. András György Deák, Senior Research Fellow at the Institute for Strategic and Defense Studies of the National University of Public Service (NKE), said that the sanctions could lead to a 12-13 percent shortfall in global trade, which the market will have to address on the demand side and then on the supply side.
According to the expert, the demand and supply need to be met by the market and the supply side.
Without Russian gas, we will certainly not endure the winter of 2023-24, which will be exacerbated by the current extreme market situation, Deák said. However, he added that the gas market is more flexible than oil and that price adjustment has started at the global level, which could help to avoid sky-high gas prices in early 2024.
But the most important of all is the price cap on oil. From a Hungarian point of view, it is of particular importance that the capped price does not apply to Russian oil coming by pipeline, and if for some reason our pipeline oil supplies to Russia become unavailable, there is no cap on Russian oil purchased by sea, the article states.
András György Deák said that the original proposal came from the Americans and they wanted to introduce it on a global scale. “It would mean that Western powers would sanction third countries for Russian connections, including India,” he said.
But if they buy from them below a certain price level, no such restrictions would come into force, this is an extension of the sanctions war, Deák added.
According to the expert, the new sanctions package would basically make sense if the sixth package were lifted. He said that it is not yet clear where Europe will find the missing supplies.
Deák added that those who accept the sanctions will be caught between two fires, as Vladimir Putin has announced that those who do not pay for oil at market prices will no longer be supplied. “But if a country does pay the full amount, Western sanctions will be imposed,” he noted.
According to Index, in theory, “Hungary is not in trouble from this point of view since under the European Union’s package of proposals, we will continue to pay market prices for oil coming through the pipeline, so the Russians will not in principle cut off the supply, and Western sanctions are not even that likely because of the exception already mentioned.”
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