Paul
Goble
Staunton, May 16 – The Russian
Federation has suffered from the collapse of oil prices. Most have ignored the
risk that that collapse will be matched in the gas sector because of the
differences between the two. But, Anatoly Nemiyan, a specialist on the Middle
East who blogs under the screen name El Murid, says that a gas crisis is
coming and will hit Russia as well.
Scenarios for a gas crisis “look in
many ways like those of the oil one,” El Murid says. Supply has exceeded demand
and will continue to after the pandemic passes for some time, and so prices are
subject to significant downward pressure first for liquefied natural gas which
can’t be stored and then the pipeline delivered kind (kasparov.ru/material.php?id=5EBEAD12E5B4D).
Russia is not a major player in the
former but if prices there collapse, it is quite likely that the willingness of
those who have contracts for gas delivered by pipelines, a sector in which
Russia is a major player, may simply walk away from these deals if the costs of
meeting them far exceed what operators can then sell the Russian gas they
receive to others.
Lacking a cartel like OPEC, the gas
market is likely to be subject to even more dramatic price shocks if demand
continues to fall while supply remains high as those who produce gas seek to
maintain their incomes by selling more. Thus, the looming gas crisis won’t
start with Russia in the way the oil crisis did, but it will hit Russia
ultimately and hard.
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