Related Articles
Forward article link
Share PDF with colleagues

Chipping away at Gazprom’s contracts amid falling demand

With demand in its largest market declining, Gazprom is making price concessions to its big European gas customers. Will its passion for oil-indexed prices be next to succumb, asks Kwok W Wan

The continued divergence between oil and gas prices, coupled with lower gas demand, has prompted Gazprom to reduce long-term prices for five large European customers. And the move might not only signal that other customers will see similar concessions, it could also be another blow to the Russian gas monopoly’s desire to maintain oil-indexed gas contracts. Most of Russia’s gas is sold to Europe under long-term, oil-linked price deals. But with North Sea Brent crude prices and those of European gas diverging over the past two years – oil prices have soared, while gas has registered just a small increase – European utilities, forced to buy at higher oil-indexed prices, yet selling at lower sp

Also in this section
Storage fundamentals turn
20 October 2017
A shift in most oil markets from contango to backwardation is changing the outlook for the global storage business
Electric charge for EVs in Norway
18 October 2017
The electric vehicle market is expanding rapidly in Europe but a lack of sufficient infrastructure remains a problem. Christina Bu, Secretary General of the Norwegian Electric Vehicle Association explains all
Russia's LNG threat boosts export liberalisation prospects
17 October 2017
Don't expect the market to be freed up anytime soon, but Russia is at least thinking about busting Gazprom's monopoly on pipeline gas supply