European gas market: Finding a balance between supply and demand sides in the context of the energy crisis

Abstract

Currently, the demand for the supply of liquefied (LNG) and compressed (CNG) gas to the EU regional market significantly exceeds its supply. For the past five years, the gas market in Europe has been exclusively a buyer’s market, аble to dictate the main demand constraints in this market. However, since the autumn of 2021, the trend has changed in favor of suppliers, i. e. the supply side. The trend change occurred due to a number of reasons that led to the fact that world energy prices rose rapidly, reaching such a high level that entire industries, private entrepreneurs and ordinary consumers became insolvent in a short time. The article examines the main suppliers of natural gas to the EU countries, analyzes the dynamics of renewable and non-renewable sources in the production of electricity in the Europe. The possible delivery volumes of major natural gas suppliers, including the supply of compressed and liquefied gas, are analyzed. The purpose of the study is to identify the key causes of the current energy crisis in the European gas market. The research consists in assessing the factors shaping the supply-demand ratio in the regional European gas market in the medium term, as well as in answering the question: will Russian gas really not find its buyer in other regional markets? Conclusions are drawn that the current situation of natural gas supplies from Russia to European countries should be considered from the standpoint of the existing long-term cooperation between Gazprom PJSC and European companies. Otherwise, the European economy will feel the negative impact caused by the shortage of supply оn the gas market.