Ref Ukraine

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(3 March 2014, 11:26)Tarrel Wrote: Unlikely that Russia would cut off gas supplies to the EU. there would be limited benefit to them in doing so, and they need the income. If they had military ambitions beyond Ukraine, then cutting off the gas could be a military strategy to "soften up" the EU, but otherwise, why would they? I don't think Putin is stupid enough to just engage in a simple "tit for tat" sanctions war.

However, there are reports on BBC news this morning about gas prices to Ukraine for the next quarter being raised. The argument is that Ukraine has not been paying well, so the current low price can't be justified.

In a political climate where there is no love lost between the EU and Russia, and when the EU needs Russia's gas, putting the price up seems to be a more sensible move than cutting off the supply.

(By the way, apparently the Baltic pipeline has something like half the capacity of the Ukraine one)

We have had a mild winter and, as a result, our gas storage is in good shape compared to last year. Long range weather forecast is not suggesting a major late cold snap, so I think we're pretty safe from any immediate supply shocks in the UK. However, I would expect the uncertainty over supply to impact on future wholesale prices, so expect big energy price increases next Autumn.

If there's any prepping to bed one, I would suggest it is medium-term, in thinking about how to minimise one's dependence on the grid (both gas and electric) for next winter.

Tarrel,

the problem is that the primary pipeline to W Europe runs through Ukraine.

Any attempt to manipulate Ukraine with reduced or severed flows of gas or oil will create collateral damage to everyone downstream of UKR.

The new pipe line opened across the Baltic will take up some slack, and of course Germany where that pipe arrives will of course endure shortages in order that sufficient volumes make it through to the United Kingdom.... Of course they will ( NOT!)

There 's even the scenario of the UKR government in a position of losing control completely might cut the pipeline in order to cause damage to the RF economy.

Several scenarios here... none of them rosy...