Doğan, in his assessment to the AA correspondent regarding the developments in the European energy market, said that the turning point of the energy crisis that started with the pandemic was the Ukraine-Russia War.
Noting that there was great uncertainty in the markets after the pandemic, Doğan reminded that the price of 1000 cubic meters of natural gas in Europe in 2020 was around 60-70 dollars.
Stating that there was a daily flow of 385 million cubic meters of natural gas from Russia to Europe during the aforementioned period, Doğan said, “Russian gas was coming to Europe via Poland and Ukraine, as well as through the Nord Stream-1 pipeline. The price level, which reached 200 dollars, was not given much importance. Traders who wanted to make a profit also started to sell the gas they had stored at $70 when it rose to these levels.” he said.
“GAS FROM NORTH CURRENT-1 HAS ALREADY REDUCED”
Reminding that Russia did not produce more than the contract amounts, perhaps considering a “game plan”, and perhaps he acted cautiously because the demand forecasts did not reach him, Doğan continued as follows:
“Small buyers and companies in Europe thought, ‘Russia will sell us gas if we need it anyway.’ This did not work out as they expected. Before the 2008 global crisis, we were seeing 500 dollars and saying ‘what a high price’, but here it started to go crazy. There was an element to solve. Nord Stream-2 was ready. Prices were high, gas could be bought in the future market, but if Nord Stream-2 came into effect, prices could drop. Unfortunately, Nord Stream-2 was not opened. This is how we arrived at the beginning of 2022. Prices reached the level of 1500 dollars ”
Stating that the energy crisis in Europe escalated with the start of the Russia-Ukraine war, Doğan said, “Europe actually dealt the first blow here with the cancellation of Nord Stream-2. This step was the first blow that put the energy equation into the war. How can this cancellation be translated? Think about it. As Russia, you have made an agreement with Western buyers. You have laid a thousand kilometers of pipes under the sea and invested worlds. All of a sudden, the other party says ‘we canceled this, this project will not happen’. I think this caused a lot of discomfort in Russia.” made its assessment.
Explaining that there were many mutual incidents after the cancellation of Nord Stream-2, Doğan said, “Until the move to cut the gas flow, the amount of gas coming to Europe was already around 73 to 76 million cubic meters per day. Already, instead of 160 million cubic meters from Nord Stream-1, 33 million cubic meters per day. cubic meters of gas was coming in. So this last shutdown is not something that can be evaluated as ‘the Russians cut off the gas.’ There was no gas anyway.” he said.
RUSSIA CAN FILL EUROPEAN TANKS, BECAUSE GAS STEADY SHUT DOWN
Doğan stated that he estimates that Europe’s gas demand will vary between 1.6 and 1.8 billion cubic meters per day this winter.
Pointing out that the winter season in Europe started earlier than in Turkey, Doğan said:
“In Turkey, we can put gas in the warehouses in November. When the weather is 20-25 degrees in conditions such as pastrami summer, we can throw gas into the warehouse in those temperatures. It is 18 degrees in October and we do not need a big heating, but in October in Europe, people use gas to heat their homes. Gas starts to be withdrawn from the tanks. Therefore, the period of filling the tanks in Europe ends at the end of September. At this stage, Europe could not reach the desired target in its warehouses, but it filled it at a fairly good rate. This is because Russia gradually reduced the gas this year. Russia is starting the gas in the furnace. Or if it had stopped immediately after the war, Europe wouldn’t have had a chance to see these levels.”
Stating that Russia did not cut off the gas immediately because he did not expect such a harsh reaction from Europe, Doğan said, “Europe had announced a 15 percent savings plan in natural gas. Despite the 15 percent cut, if we consider the cold winter scenario, the gas in Europe’s warehouses will reach the end of January. It ends right. To avoid that situation, they will now need to reduce consumption by a little more than 15 percent, so that they can use the gas in the tanks sparingly enough to last the whole winter. If you throw all your bullets at once, you will have no more lead in February and March.” he said.
INDUSTRIAL INTERRUPTIONS MAY OCCUR IN EUROPE
Doğan stated that it is also a possibility for prices to be left alone in Europe, adding that there may be some cuts in the industry, but some factories that supply food can be exempted from this.
Stating that the cuts in the said areas will not be enough and that high prices will be applied to the residences, Doğan said:
“A senior manager there says I can afford these prices, but they will not be able to pay it. The government will help them a little. Still, it will not be enough and it is thought that some people, especially working people, will flee to the south of Europe. From EU countries, south of Italy, Malta, Spain and It may be Portugal. A movement towards these places is expected, but for the working population, because they have to stay in Europe due to their insurance. The unemployed will choose cheaper countries. There is an expectation that there will be a migration towards African countries such as Morocco and Tunisia as well as Turkey. Will it happen? We don’t know that yet, but Europe will survive this winter with serious damage.”