The days of British gas prices being seen in isolation are long gone, according to an academic at the University of Oxford’s Institute for Energy Studies.
At an event hosted by National Grid last week, Professor Jonathan Stern informed a business audience the “days of thinking about the UK gas market as separate disappeared some time ago.”
He noted how UK gas prices have “converged significantly” since 2008 with European prices.
Later, the professor said: “What happens in the UK is increasingly subject to what happens in the global market.”
Whether China decides to buy gas from Russia is likely to affect prices in future, he suggested, as this means “the question is, how much is left for Europe?”
“Last chance” saloon for Russia, Ukraine and EU?
On the Russia-Ukraine tensions, the academic argued it was against Russian President Vladimir Putin’s interests to provoke a European gas crisis.
Prof Stern said: “The last thing he [Putin] wants is a European gas shortage. But he has [expressed an] absolute determination to not allow Ukraine to ‘steal gas'”.
Countries closer to Russia are far more likely than western European nations to feel the crunch, such as Bosnia, Serb, Macedonia, possibly even Bulgaria, he said.
This week Thursday and Friday are “crucial days” and offer a “last chance” to reach an agreement between the two nations before winter.
That’s because the EU’s energy lead, Commissioner Oettinger, will be moving jobs and though he has done an “excellent job”, the professor reasoned however “capable” his successors are they have “no background” in the discussions.