Russia wants gas price 60% lower to keep energy grip on Europe

Russia wants natural gas prices in top buyer Europe to come down by about 60% in the longer term as a prolonged rally will destroy demand for Gazprom PJSC’s supplies, according to two officials with knowledge of the country’s energy policy, Report informs, citing Bloomberg.

Russia wants prices in Europe to be about $300-$400 per thousand cubic meters, the sweet spot that would help Gazprom keep its grip on the continent’s market, even as nations from the U.K. to Poland transition to cleaner energy sources, one official said. Another official named a range of $200-$400, with prices at the low-end being a less acceptable scenario.

That stands in sharp contrast to current benchmark prices in Europe, which have repeatedly surged to record levels in recent weeks amid an energy crunch. Concerns of a supply shortage ahead of winter have emerged, with the continent’s inventories at their lowest seasonal level in at least a decade, pipeline flows capped, and competition with Asia for liquefied cargoes. The Kremlin has been publicly worried about the price rally’s demand-destruction effects on Gazprom, which last year supplied nearly a third of all gas consumed in Europe.