A Disturbing Drop in Russia Gas Supplies to Europe

A thread from Founder Jens Nordvig:

This chart is not getting nearly enough attention. Russia is cutting natural gas supplies to Europe, with dramatic implications for prices, and for energy security.

There is a disturbing drop in Russian gas supplies to Europe

(deliveries via Nordsteam cut by more than half over the last week)

First, here is a chart that show the flow via Nordstream over a much longer time period.

It is rare that there is a big drop (and the drops we have seen in the past have been around maintenance).

On this occasion, top politicians have been pretty clear that this is a Russian provocation (as opposed to a technical issue).

Draghi has been clear on this point for example - see quotes in this Reuters article.

Second, we can see that the drop is having a dramatic impact on natural gas prices in Europe, which are having a renewed spike, after calming a bit in the months after initial 'invasion spike'.

Third, the higher natural gas import prices will have a big impact on the Eurozone balance of payments.

The @ExanteData model of the Eurozone current account is projecting that the surplus will almost be gone if the current energy prices persist.

Fourth, European gas inventories were filling up at a decent speed, on track for a decent buffer for the next winter until recently. But with Nordstream flows cut by more than 50%, this is now a much more uncertain outlook. And rationing could be needed (in certain jurisdictions).

If there was any doubt, it is now a full-blown economic war for the entire continent. Putin had always said in the past that energy supplies would be safe. But they are clearly not.

It is time for Europe to get serious:

- Reduce demand (increase efficiency, stop energy use that is not absolutely necessary)

- Speed up energy translation away from Russian sources using all methods known

So far, the energy shock from the Russian invasion was mostly a price shock. But more dramatic quantify issues may follow, given what we are observing in terms of disrupted flows over the past week.

This issue is not getting enough attention.

END.