A nightmare forecast for the course of the price of natural gas brings the news agency to the fore Reuters invoked document of the Russian Ministry of Financewhich estimates that the average export price of natural gas will more than double this year to $730 per 1,000 cubic meters.
Natural gas flows from Russia, Europe’s top supplier, have been running at reduced levels this year after a route was shut down when Moscow sent troops to Ukraine in February, while supplies to some European countries were cut off because they refused to pay in rubles. At the same time, a dispute had also broken out between Russia and Germany over the repair of a turbine for the Nord Stream 1 pipeline. As a result of all this, natural gas prices have increased.
According to the document cited by Reuters, Russia’s economy ministry expects natural gas exports from Gazprom ( GAZP.MM ) to fall to 170.4 billion cubic meters (bcm) this year, compared to its forecast published in May for 185 billion cubic meters versus 205.6 billion exported in 2021.
He expects natural gas volumes to continue to decline beyond this year, but gave no explanation for that.
“As a result of already tight supplies, Gazprom’s average natural gas price was forecast at $730 per 1,000 cubic meters in 2022, more than double the $304.6 per 1,000 cubic meters last year, and representing a 40% increase compared to the previous forecast of $523.3”, underlines Reuters.
Russia began gradually increasing its oil output after sanctions-related curbs and as Asian buyers increased purchases, prompting Moscow to revise upward its forecasts for production and exports through the end of 2025, according to with the document.
Gazprom also said gas supplies to China were increasing, but gave no details, and Europe remains by far the biggest market for Russian gas.
As Reuters points out, higher volumes of oil exports, combined with rising gas prices, will help Russia earn $337.5 billion and $255.8 billion this year and next year, respectively.
Last year, Russia put $244.2 billion into its coffers from energy exports, the ministry said.
Overall, the forecasts of the Ministry of Economy suggest that the Russian economy is handling the sanctions better than Moscow initially feared and will shrink less than expected.
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