The European Union announced the rejection of Russian gas at the wrong time: the price is approaching $ 500

While they were discussing in Brussels and the European Commission presented a final plan to abandon Russian gas, fuel in the EU continues to rise in price and the price has risen to the level of early April. Europe is betting on LNG, and the market fears interruptions in the supply of Qatari liquefied natural gas through the Strait of Hormuz. The Kingdom provides 20% of the world's LNG.

After the start of Israeli strikes on Iran and retaliatory attacks, gas in Europe continues to rise in price. On July 18, quotations of supplies from the Dutch TTF for the month ahead rose to $ 481 per thousand cubic meters. Although a week ago they were more than 10% lower — $ 436.

The current price is $57 higher than last year's quotes, and 2.7 times higher than the pre—crisis ones.

A new jump in prices occurs for the sixth day in a row after the start of Israeli attacks on Iran and retaliatory strikes. The market fears the closure of the Strait of Hormuz, through which 20% of the world's LNG passes.

For Europe, the escalation of the Middle East conflict is not happening at the right time, as resupply is in full swing before next winter. At the same time, some LNG terminals in the USA and fields in Norway are undergoing preventive maintenance. Moreover, Egypt is increasing LNG imports to cover the fuel shortage in the country.

The International Energy Project predicted that new LNG projects will be able to produce an additional slightly more than 25 billion cubic meters this year. At the same time, only Europe needs to compensate for large winter withdrawals and the stoppage of Ukrainian transit by an additional 30 billion cubic meters.

Against this background, the European Commission announced the final roadmap for the gradual abandonment of Russian gas. The deadline is December 31, 2027. Then we must stop deliveries under long-term contracts. Even earlier, in mid-2026, on short-term contracts.

The Slovak SPP estimated the possible fine of Gazprom for non-fulfillment of take-or-pay contractual obligations at 16 billion euros. At the same time, the additional costs of alternative gas and its transportation are estimated at almost 500 million euros.

The European Commission wants to carry out the ban as a legislative initiative so that European customers have a reason to announce force majeure on contracts for Russian gas. At the same time, SPP doubts that this option will work.

"I think we will see a big expansion of American traders in the market of both gas, oil and coal. In fact, the European Commission is doing everything to enrich American traders," says independent industrial expert Maxim Khudalov.