{"id":13277,"date":"2022-11-07T14:51:15","date_gmt":"2022-11-07T11:51:15","guid":{"rendered":"https:\/\/stage.kse.ua\/news\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\/"},"modified":"2026-10-15T09:45:18","modified_gmt":"2026-10-15T09:45:18","slug":"european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update","status":"publish","type":"news","link":"https:\/\/kse.ua\/en\/news\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\/","title":{"rendered":"European Gas and Power: Overreacting to the Threat of a Russian Cutoff (update)"},"content":{"rendered":"

Old version<\/a><\/p>\n

By Jacob Nell, Borys Dodonov and Nataliia Shapoval<\/strong><\/p>\n

Abstract<\/strong><\/p>\n

The paper investigates the current price rally on the European gas market. We argue that there has been a large price overshoot, which is an overreaction to the risk of a\u00a0 complete cut off of gas supply by Russia this winter. We provide three reasons for believing Europe can already manage without Russian gas this winter.\u00a0 First,\u00a0 a major adjustment in sources of supply has already happened. Russia has declined from supplying 36% of Europe\u2019s gas imports in 2021 to supplying 9.9% so far in 2H22 \u2013 so Europe is no longer critically dependent on Russian gas. Second, Europe is reducing its gas consumption rapidly \u2013 over 11% down on last year in 1H22 \u2013 and we argue the Commission\u2019s target 15% reduction in gas demand this winter is fully achievable \u2013 which would on its own more than cover a complete Russian gas cut off. Third \u2013 reflecting these shifts in supply and demand \u2013 European gas storage is on track for a near record build this summer despite declining Russian flows. On current trends, we estimate 2022 will see the second largest European gas storage build ever, and on November 2, 2022 European storages were 95% full \u2013 enough to cover the average winter draw nearly 2 times over and even a stress scenario of the largest recent winter draw and a complete Russian gas cutoff from September. Finally, Europe has a trump card in its back pocket, since it could fully or largely replace remaining Russian gas volumes by increasing production at the giant Groningen field. Given these factors, we expect the gas price to fall back to more normal levels, as traders increasingly realize that Europe can avoid a gas crunch this winter without Russian gas.<\/p>\n

European gas and power markets are behaving in a paradoxical way. On the one hand, gas and power prices have just set new highs, and are priced to stay extremely high for years, reflecting concerns of a complete Russian gas cut off.\u00a0 This would drive higher inflation and a greater squeeze on real incomes, likely triggering a recession.<\/p>\n

Chart 1:\u00a0 European Gas at record highs,\u00a0 Dutch TTF gas futures,\u00a0 EUR\/MWh<\/p>\n

Source: ICE<\/p>\n

But the data show rapid volume adjustment is underway and by the end of October prices has already declined more than twofold from August peaks. In fact Europe is on track to have the storage \u2013 backed up by underlying shifts in supply and demand\u00a0 \u2013\u00a0 to dispense with Russian gas this winter, we estimate. Clearly, there will be an adjustment cost of elevated prices for a period to end Europe\u2019s heavy dependency on Russian energy.\u00a0 But we saw\u00a0 \u2013 a\u00a0 more than 10 fold surge in gas prices in the third quarter 2022 and power prices and extreme price volatility \u2013 as an overreaction, highlighting deficiencies in energy markets.<\/p>\n

Chart 2.\u00a0 On current trends, European gas storage is on track to just cover a cold winter and a full Russian gas cutoff from September 1, we estimate.<\/p>\n

Source: AGSI for data on gas storage and winter draws, KSE Institute for modelling of additional build in 2022.\u00a0 ENTSOG for data on Russian gas flows, provided by Bruguel.<\/p>\n

*Note: we assume that a Russian gas cutoff would deprive Europe of the volumes currently flowing through the Nord Stream 1, Ukrainian Gas Transit System and Turkstream pipelines from September 1. See below for further discussion and explanation <\/em><\/p>\n

We make three main arguments for our view that a \u201cno drama\u201d adjustment is underway.<\/strong><\/p>\n

First<\/strong>, the major adjustment in sources of supply has already happened.\u00a0 Russia is no longer the major supplier of gas to Europe.\u00a0 So far in 2H-22, both LNG and Norway have provided about three times as much gas to Europe as Russia.\u00a0 Russia has declined from supplying 36% of Europe\u2019s gas imports in 2021 to supplying 9.9% so far in 2H-22.\u00a0 Russia has already turned from the leading to a second-order source of gas supply for Europe.<\/p>\n

Chart 2:\u00a0 European natural gas imports, by source<\/p>\n

Source: ENTSOG, Brueghel<\/p>\n

Chart 3. Russia gas flows to Europe were currently running below 20% of the level of Norway and LNG in October 2022<\/p>\n

Source: ENTSOG, Brueghel<\/p>\n

Second<\/strong>, European gas storage is on track for a near record build.\u00a0 Despite starting emptier than in 2021, they were 1\u00a0060 TWh or 95% full by November 2, 2022. It is much higher than the approved EU\u2019s best efforts target of 85% full.\u00a0 Moreover, storage build continued to surpass last year\u2019s pace, even after Russia completely cut\u00a0off Nord Stream flows and reduced gas supply through GTS. Moreover, the favorable forecast for November enables us to project lower than usual gas withdrawal from storage in November.\u00a0<\/p>\n

Full storage provides significant protection against a winter shortage.\u00a0 The average winter draw on European gas storage since 2010 has been 561 TwH, while the highest recent winter draw was 785 TwH in 2017-18.\u00a0 Peak 2022 storage will cover the average draw nearly 2 times over (1.82 times coverage) and even the largest recent winter draw with a large buffer ( 1.31 times coverage).<\/p>\n

Chart 4: European Gas Storage 2022: Second Highest in Record by November<\/p>\n

Source: Bruegel<\/p>\n

Chart 5.\u00a0 2022: Heading for Second Highest Storage Build on Record<\/p>\n

Source: AGSI, 2022YTD is data as of August 20, KSE Institute estimate for remainder of 2022<\/p>\n

Chart 6.\u00a0 High Coverage of the Winter Draw<\/p>\n

Source: AGSI, KSE Institute estimate for peak 2022 storage<\/p>\n

Third<\/strong>, Europe is reducing its gas consumption rapidly.\u00a0 Thus, the EU27 gas demand declined by 27.6 bcm or 10.3% yoy in January-August 2022 driven by milder than usual temperatures in Q1-Q2 and record high gas prices. The average drop in gas demand so far amounted to 3.5 bcm for the first eight months of 2022.\u00a0 Overall, the decline in gas demand is projected to be the highest in history. The IEA estimates the OECD Europe\u2019s gas demand will decline by 54 bcm or around 10% for 2022 and its further decline by 4% in 2023.\u00a0 We expect further progress in reducing gas demand, given additional policy measures, notably associated with the EU agreement in late July<\/a> on a voluntary 15% reduction in gas demand\u00a0 from August 2022 to May 2023.<\/p>\n

Chart 7. Change in the EU27 demand for gas in 8M2022<\/p>\n

Source: Eurostat, KSE Institute estimates<\/p>\n

Despite these developments, the market continues to price ongoing tightness, driving gas and power prices to unprecedented levels, reflecting fears of a complete Russian gas cutoff.<\/p>\n

But a complete Russian gas cutoff is no longer such a potent threat.\u00a0 The supply\u00a0 gap that has to be covered in this event is down by two thirds from 3 bcm a week at the start of the war to under 1 bcm a week after six months \u2013 and even at these reduced\u00a0 levels of Russian supply, Europe has been filling its storage more rapidly than last year.\u00a0 Suppose Russia cut off remaining flows \u2013 which recently average 505\u00a0mcm\/week\u00a0 \u2013 to Europe.\u00a0 Compared to the current situation. Europe would need to find 30 weeks @ 505 mcm\/week. This amounts to an additional 17 bcm of gas\u00a0 by the end of the heating season in April 2023. However, we believe this overstates the potential problem. Given the close political relationship\u00a0 between Russia and Hungary, and the cheap gas and oil which Russia provides to Hungary as part of this relationship, we would expect special arrangements to allow Russian gas to continue to flow to Hungary via Turkstream.\u00a0 If around 160 mcm\/week keeps flowing to Hungary, this reduces the potential impact of a Russian supply cut to 345 mcm\/week, and the winter shortfall in Russian supply to 11.1 bcm.<\/p>\n

How could such a shortfall from a complete Russian gas cutoff be covered?<\/strong><\/p>\n

We see three possible solutions, each capable of covering the problem on its own, and in combination providing some leeway.<\/p>\n

First<\/strong>, storage. European gas storage, as of November 2, has 1060 TwH,\u00a0 which comfortably covers a normal winter draw (564 TwH) and the loss of remaining Russian gas supply (215 TwH) out to April. It could even cover \u2013 just!- the worst winter draw recorded (785 TwH) and the loss of the remaining Russian gas supply (215 TwH).<\/p>\n

Second<\/strong>, reduced demand. The use of gas in its main markets \u2013 for power, for heating,\u00a0 and in industry \u2013 can vary significantly in the short run.\u00a0 In power, there is significant existing power capacity \u2013 e.g. coal, oil, lignite, biomass, nuclear\u00a0 \u2013 which can be used more intensively to replace gas.\u00a0 In residential and commercial usage,\u00a0 demand management measures \u2013 notably, setting maximum temperatures for heating, minimum temperatures for cooling, and more efficient settings for boilers \u2013 \u00a0 can cut demand dramatically, as seen in the 12% reduction in electricity demand in Japan after Fukushima<\/a>.\u00a0 \u00a0 And industrial demand \u2013 often initially shielded by long term contracts from higher prices \u2013 has significant elasticity \u2013 albeit in some cases through shutdowns in response to higher prices.\u00a0 In May, demand reduction and gas substitution measures were only starting to come online, but EU7 gas consumption was already down by 12% vs the long term May average.\u00a0 The Commission\u2019s targeted 15% reduction in gas demand should reduce gas demand by 5 bcm a month \u2013 more than enough, given only 2.4 bcm\u00a0 per month is needed to cover a complete Russian gas cutoff.<\/p>\n

Chart 8.\u00a0 European gas demand evenly split between Power&Heat, Industry and Residential&Commerical<\/p>\n

Source: European gas balance 2020, IEA.\u00a0 In this presentation we have added refining usage, and petrochemical energy and non-energy usage together to provide a combined figure for the \u201cdownstream\u201d segment of the energy industry (\u2018Refining and Petchems\u2019).<\/p>\n

We think this planned 15% reduction is fully achievable. For instance, the Energy Information Administration estimated \u20130.15 and \u20130.18 price elasticities for residential and commercial consumers in the second year after natural gas prices double.[1]<\/a> Since the natural gas price more than doubled in 2021 and is more than five times higher now than it was in 1H2021 we would expect even higher price elasticities \u2013 although this will also depend on the extent to which wholesale price increases have been passed on to households, which varies substantially.<\/p>\n

The consumer response to large gas price increases during Ukraine\u2019s phasing out of natural gas price subsidies for residential consumers in 2015-2016 provides a relevant comparison. The prices increased more than four times in real terms over two years and in response, households decreased their natural gas consumption by 25% and continued decreasing it thereafter. In 2020 residential natural gas consumption was only 54% of the 2014 level.<\/p>\n

Third<\/strong>, we see near-term scope for additional gas supplies, notably from LNG and the giant Dutch Groningen field.<\/p>\n

The gas bulls argue that there was a dearth of investment decisions on new LNG projects in recent years, and the world will be short LNG at least until 2024 or perhaps 2025, when the giant new Qatar LNG expansion\u00a0 and the recent set of US LNG projects are scheduled to come online. We see three problems with this argument.\u00a0 First, it overstates the dearth of new capacity, with substantial expansions coming online in 2022 in the US at the Calcasieu Pass and Sabine Pass LNG facilities, which increase peak liquefaction capacity by about 24 bcm per year. \u00a0 Second, higher prices incentivise additional production, with producers seeking to maximise output, implying some increase in supply at existing facilities.\u00a0 Third, and most importantly, the Europeans,\u00a0 including the UK,\u00a0 are\u00a0 relatively small in the global LNG market, accounting last year for\u00a0 21% of LNG demand,\u00a0 and they are paying more \u2013 so the cargoes are flowing to Europe, with lower income gas consumers such as Pakistan losing out in particular. According to forward curves, TTF is expected to trade at a premium of USD 13\/MBtu above Asian spot LNG during the 2022\/23 gas winter (see figure below), enabling strong LNG inflow into Europe.\u00a0 In fact, the LNG response has already beaten expectations.\u00a0 For instance, in the early days of the war, the US and Europeans announced a deal\u00a0 to supply 15 bcm more LNG to Europe over the course of 2022.\u00a0 Although touted as ambitious, this proved a huge underestimate of the LNG response \u2013 since the invasion, European LNG supply is already up 24 bcm over last year. If LNG supplies continues at the current rate, additional LNG supply in 2022 will amount to 61 bcm, a 64% increase.\u00a0 And given the flexibility shown by the LNG market so far, we see potential for further supply at high prices, since lower income developing countries, who are likely to be more price-sensitive than European buyers and often with access to cheaper coal as a substitute, accounted for 231 bcm of LNG demand in 2021.<\/p>\n

[1]<\/a> https:\/\/www.eia.gov\/analysis\/studies\/buildings\/energyuse\/pdf\/price_elasticities.pdf<\/a> (IEA Gas Market Report Q4 2022)<\/p>\n

Chart 9:\u00a0 2021 LNG demand, bcm<\/p>\n

Source:<\/p>\n

Chart 10. TTF, Henry Hub and Asian spot prices in 2020-2022<\/p>\n

Source: IEA<\/p>\n

Groningen. Finally, as we have discussed in more detail in a separate note<\/a>, Europe could fully or largely replace remaining Russian gas volumes by increasing production at the Groningen field, which has reserves of 450 bcm and ran at 50 bcma in the last year before production was restricted. Production has been restricted as a result of social discontent with property damage from subsidence, exacerbated by company obstruction in paying compensation.\u00a0 But, as we point out, at current gas prices, the additional revenues, which can be paid to the local region, are sufficient to compensate and reward Groningen for taking additional seismic risk.\u00a0 For instance, the additional revenues from 6 months of production at a historically modest 2 bcma per month would be sufficient to buy the entire residential\u00a0 housing stock of Groningen at market prices.<\/p>\n

Chart 11: Groningen\u2019s annual production, bcma<\/p>\n

Source: NLOG<\/p>\n

Downside Risk to Gas Prices<\/strong><\/p>\n

Our view is that the market has got its pricing of European gas and power wrong: the market is pricing a crisis, but there is no crisis.\u00a0 Europe has multiple options to close any supply gap this winter\u00a0 from Russia cutting off its remaining\u00a0 gas supply, including high storage, reduced gas demand and gas supply from other sources.<\/p>\n

Here we highlight three downside risks.<\/strong><\/p>\n

Warm winter.\u00a0 Gas demand is closely correlated with temperature.\u00a0 Consequently the tightness in the European gas market is heavily dependent on the risk of a cold winter which drives a strong 22\/23 winter draw. But if Europe has a warm winter, with a winter draw in the 300-350 TwH range, as in 2014-15 and 2011-12,\u00a0 it would exit the heating season with around 700 TwH, ie storage over 2\/3rds full.\u00a0 Admittedly these weak winter draws reflected a time when Dutch production was higher, before the winding down of Groningen.\u00a0 But even an average winter draw, similar to 2019\/20, of 550-600 TwH would leave storage levels in spring 2023 nearly twice the 2022 spring trough.<\/p>\n

Substitution of gas in power.\u00a0 Europe has had bad luck this summer in the power sector.\u00a0 Low rainfall has hindered hydro power generation, river transport \u2013 often used to transport fuel \u2013\u00a0 and power plant cooling, and a large portion of the French nuclear fleet has been down for repairs, so the call on gas in power has remained robust despite the record prices, and this has amplified the impact of high gas prices by driving electricity prices up to record levels too.\u00a0 However, the risks are biased against this situation persisting, with stronger autumn winds and heavier rainfall, a return of some of the offline French nuclear fleet, and the firing up of idle coal and lignite plants likely to reduce the use of gas in power.<\/p>\n

Double impossibility.\u00a0 At the moment, market pricing for gas and power \u2013 staying at record levels for years \u2013 does not looks coherent.\u00a0 In fact we think it looks incoherent in both economic and energy terms.\u00a0 In macro terms, if current energy forwards are realised, inflation will surge further, squeezing disposable income and driving a recession, even as the higher implied inflation likely drives further tightening from the ECB.\u00a0 Such a recession would then reduce energy demand and lower prices for energy. And in energy terms, at these extraordinary prices \u2013 with gas 4-5 times more expensive than oil \u2013 we would expect to see broad substitution of gas with other fuels, resulting in deep destruction of gas demand.<\/p>\n

In our view, the main risk in this situation is complacency. European governments have policy room to dispense with Russian gas immediately, provided they are prepared to be bold and respond adequately to the changed circumstances.\u00a0 However, this implies a willingness to adjust, which has not yet always been evident\u00a0 \u2013 for instance, we think the Dutch should keep the Groningen field\u00a0 pumping and the Germans should keep their nuclear plants on until the energy crisis is past, but so far both governments have stuck to their existing policy of phasing them both out at the end of this year.<\/p>\n

Why is the market pricing a crisis?<\/strong><\/p>\n

If gas and power are overpriced, and the balance of risks is to the downside,\u00a0 since Russia\u2019s threat to drive disruption by cutting off gas supplies is increasingly a hollow threat, and Europe can now manage without Russian gas,\u00a0 why is the market pricing a crisis, at over 10 times normal prices for gas and electricity in Q3 2022, extreme volatility, and\u00a0 prices staying at current elevated levels for years?<\/p>\n

Probably the main reason is the grip of an established narrative. Analysts and traders are used to seeing Russian gas as indispensable to the European gas market, and may continue to believe this until Europe has survived the real world test of a winter.\u00a0 However, this belief ignores how the underlying shifts in supply and demand have already supported a strong storage build, which should allow Europe to cover a cold winter and a Russian gas cutoff.<\/p>\n

In our view, the extreme recent movements in markets \u2013 with daily price swings of over 10%, and prices which are over 10x average levels, and far in excess of prices required to incentivise additional supply \u2013\u00a0 are suggestive of market manipulation, and warrant further investigation by regulators.\u00a0 We see two potential sources of risks.\u00a0 First, fixed income and commodities markets are often dominated by a small group of well-informed leveraged speculators.\u00a0 Since the rest of the market often takes its lead from this group, it can be a profitable strategy for this group to exaggerate a trend, before exiting at a profit.\u00a0 As a result, market pricing can often be more extreme than a neutral best estimate, since unjustified pricing \u2013 and a profitable trade \u2013\u00a0 can continue\u00a0 for some time until a theory is corrected by hard facts.\u00a0 The second is the risk that Russian-controlled funds are taking a position in European energy markets for political reasons, to drive higher energy prices and put more pressure on European governments to withdraw their support for Ukraine. And relatively small trades can have a disproportionate impact in thin markets.<\/p>\n

Recap: Europe on track for a rapid and smooth adjustment, yet markets pricing a crisis<\/strong><\/p>\n

Markets are pricing a long and hard energy crisis in Europe, which would drive inflation higher and likely lead to a recession.\u00a0 But this is at odds with the facts: \u00a0 the volume adjustment in European gas markets is\u00a0 going well, with other sources of supply up strongly, especially LNG, demand down markedly, and the EU on track for a strong storage build, adequate to cover the winter draw and a Russian gas cutoff.\u00a0 As a result, Europe is now close to being able to dispense with Russian gas, depriving Russia of its ability to blackmail Europe using the gas weapon and of its gas export earnings, which could be worth over $40 bn over the winter at current prices\u00a0 \u2013 particularly if the Dutch decide to tap Groningen until the energy crisis is over.<\/p>\n","protected":false},"excerpt":{"rendered":"

Old versionBy Jacob Nell, Borys Dodonov and Nataliia Shapoval Abstract The paper investigates the current price rally on the European gas market. We argue that there has been a large price overshoot, which is an overreaction to the risk of a complete cut off of gas supply by Russia this winter. We provide three reasons\u2026<\/p>\n","protected":false},"featured_media":0,"template":"","categories":[251],"tags":[254],"department":[],"news_type":[34],"project":[],"region":[108],"unit":[223],"class_list":["post-13277","news","type-news","status-publish","hentry","category-sanctions-en","tag-sanctions-en","news_type-news","region-russia","unit-institute-en"],"acf":{"primary_unit":223,"news_intro":"","header_cta_mode":"event","header_event_cta_text":"\u0414\u043e \u043f\u043e\u0434\u0456\u0457","header_event_cta_url":"","header_research_cta_text":"\u0427\u0438\u0442\u0430\u0442\u0438 \u0432\u0441\u0435 \u0434\u043e\u0441\u043b\u0456\u0434\u0436\u0435\u043d\u043d\u044f","header_research_pdf":null,"author_person":"","author_name":"","related_news":null,"related_events":[],"related_people":[],"related_links":null,"external_link":"","external_link_label":"","is_featured":false,"is_featured_archive":false,"quote_text":"","quote_author":"","quote_author_role":"","program_title":"\u0424\u043e\u0440\u043c\u0430\u0442 \u043f\u0440\u043e\u0433\u0440\u0430\u043c\u0438","program_items":null,"reference_title":"\u0414\u043e\u0432\u0456\u0434\u043a\u0430","reference_content":"","source_system":"migration","source_id":"49215","content_owner":"kse","last_reviewed":null,"visibility":"public","platform_id":"","platform_version":"","platform_managed":false},"yoast_head":"\nEuropean Gas and Power: Overreacting to the Threat of a Russian Cutoff (update) - KSE<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/kse.ua\/en\/news\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"European Gas and Power: Overreacting to the Threat of a Russian Cutoff (update)\" \/>\n<meta property=\"og:description\" content=\"Old versionBy Jacob Nell, Borys Dodonov and Nataliia Shapoval Abstract The paper investigates the current price rally on the European gas market. 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We provide three reasons\u2026\" \/>\n<meta property=\"og:url\" content=\"https:\/\/kse.ua\/en\/news\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\/\" \/>\n<meta property=\"og:site_name\" content=\"KSE\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/KyivSchoolOfEconomics\/\" \/>\n<meta property=\"article:modified_time\" content=\"2026-10-15T09:45:18+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"16 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/kse.ua\\\/en\\\/news\\\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\\\/\",\"url\":\"https:\\\/\\\/kse.ua\\\/en\\\/news\\\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\\\/\",\"name\":\"European Gas and Power: Overreacting to the Threat of a Russian Cutoff (update) - KSE\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/kse.ua\\\/en\\\/#website\"},\"datePublished\":\"2022-11-07T11:51:15+00:00\",\"dateModified\":\"2026-10-15T09:45:18+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/kse.ua\\\/en\\\/news\\\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/kse.ua\\\/en\\\/news\\\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/kse.ua\\\/en\\\/news\\\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/kse.ua\\\/en\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"European Gas and Power: Overreacting to the Threat of a Russian Cutoff (update)\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/kse.ua\\\/en\\\/#website\",\"url\":\"https:\\\/\\\/kse.ua\\\/en\\\/\",\"name\":\"KSE\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\\\/\\\/kse.ua\\\/en\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/kse.ua\\\/en\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/kse.ua\\\/en\\\/#organization\",\"name\":\"KSE\",\"url\":\"https:\\\/\\\/kse.ua\\\/en\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/kse.ua\\\/en\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/kse-ua-prod-media.fra1.digitaloceanspaces.com\\\/wp-content\\\/uploads\\\/2026\\\/08\\\/29094456\\\/Logo-3.svg\",\"contentUrl\":\"https:\\\/\\\/kse-ua-prod-media.fra1.digitaloceanspaces.com\\\/wp-content\\\/uploads\\\/2026\\\/08\\\/29094456\\\/Logo-3.svg\",\"caption\":\"KSE\"},\"image\":{\"@id\":\"https:\\\/\\\/kse.ua\\\/en\\\/#\\\/schema\\\/logo\\\/image\\\/\"},\"sameAs\":[\"https:\\\/\\\/www.facebook.com\\\/KyivSchoolOfEconomics\\\/\"]}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"European Gas and Power: Overreacting to the Threat of a Russian Cutoff (update) - KSE","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/kse.ua\/en\/news\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\/","og_locale":"en_US","og_type":"article","og_title":"European Gas and Power: Overreacting to the Threat of a Russian Cutoff (update)","og_description":"Old versionBy Jacob Nell, Borys Dodonov and Nataliia Shapoval Abstract The paper investigates the current price rally on the European gas market. We argue that there has been a large price overshoot, which is an overreaction to the risk of a complete cut off of gas supply by Russia this winter. We provide three reasons\u2026","og_url":"https:\/\/kse.ua\/en\/news\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\/","og_site_name":"KSE","article_publisher":"https:\/\/www.facebook.com\/KyivSchoolOfEconomics\/","article_modified_time":"2026-10-15T09:45:18+00:00","twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"16 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/kse.ua\/en\/news\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\/","url":"https:\/\/kse.ua\/en\/news\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\/","name":"European Gas and Power: Overreacting to the Threat of a Russian Cutoff (update) - KSE","isPartOf":{"@id":"https:\/\/kse.ua\/en\/#website"},"datePublished":"2022-11-07T11:51:15+00:00","dateModified":"2026-10-15T09:45:18+00:00","breadcrumb":{"@id":"https:\/\/kse.ua\/en\/news\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/kse.ua\/en\/news\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/kse.ua\/en\/news\/european-gas-and-power-overreacting-to-the-threat-of-a-russian-cutoff-update\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/kse.ua\/en\/"},{"@type":"ListItem","position":2,"name":"European Gas and Power: Overreacting to the Threat of a Russian Cutoff (update)"}]},{"@type":"WebSite","@id":"https:\/\/kse.ua\/en\/#website","url":"https:\/\/kse.ua\/en\/","name":"KSE","description":"","publisher":{"@id":"https:\/\/kse.ua\/en\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/kse.ua\/en\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/kse.ua\/en\/#organization","name":"KSE","url":"https:\/\/kse.ua\/en\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/kse.ua\/en\/#\/schema\/logo\/image\/","url":"https:\/\/kse-ua-prod-media.fra1.digitaloceanspaces.com\/wp-content\/uploads\/2026\/08\/29094456\/Logo-3.svg","contentUrl":"https:\/\/kse-ua-prod-media.fra1.digitaloceanspaces.com\/wp-content\/uploads\/2026\/08\/29094456\/Logo-3.svg","caption":"KSE"},"image":{"@id":"https:\/\/kse.ua\/en\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/KyivSchoolOfEconomics\/"]}]}},"_links":{"self":[{"href":"https:\/\/kse.ua\/en\/wp-json\/wp\/v2\/news\/13277","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/kse.ua\/en\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/kse.ua\/en\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":0,"href":"https:\/\/kse.ua\/en\/wp-json\/wp\/v2\/news\/13277\/revisions"}],"acf:term":[{"embeddable":true,"taxonomy":"unit","href":"https:\/\/kse.ua\/en\/wp-json\/wp\/v2\/unit\/223"}],"wp:attachment":[{"href":"https:\/\/kse.ua\/en\/wp-json\/wp\/v2\/media?parent=13277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kse.ua\/en\/wp-json\/wp\/v2\/categories?post=13277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kse.ua\/en\/wp-json\/wp\/v2\/tags?post=13277"},{"taxonomy":"department","embeddable":true,"href":"https:\/\/kse.ua\/en\/wp-json\/wp\/v2\/department?post=13277"},{"taxonomy":"news_type","embeddable":true,"href":"https:\/\/kse.ua\/en\/wp-json\/wp\/v2\/news_type?post=13277"},{"taxonomy":"project","embeddable":true,"href":"https:\/\/kse.ua\/en\/wp-json\/wp\/v2\/project?post=13277"},{"taxonomy":"region","embeddable":true,"href":"https:\/\/kse.ua\/en\/wp-json\/wp\/v2\/region?post=13277"},{"taxonomy":"unit","embeddable":true,"href":"https:\/\/kse.ua\/en\/wp-json\/wp\/v2\/unit?post=13277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}