The prospect of war in Ukraine has intensified the energy crisis in Europe and around the world. The price of Brent crude touched USD 94 per barrel, a seven year high, before falling to around USD 92 due to positive news regarding the Iran nuclear deal. Goldman Sachs expects the figure to rise above USD 100 this year, projecting an upwards trend during 2023 as well.
Though oil prices are traditionally the go-to metric when dealing with energy crises, natural gas has also attracted significant attention during the current crisis. This is especially true in Europe, where the bloc finds itself in a geopolitical conflict with Russia which supplies around 35% of its natural gas. Wholesale natural gas prices in Europe had already increased by more than 400% over the course of 2021. Although the prices fell in December due to LNG inflows, the current crisis in Ukraine not only lead to a new price increase but also brought about questions over supply security. The risk of Russia disrupting the flow of natural gas to Europe, albeit very small, exists nevertheless. European officials have been engaging with other potential suppliers such as Azerbaijan, Qatar and the US as a precaution for the worst-case scenario.
Natural gas prices have been thought to be correlated closely with oil prices. Indeed, all fossil-fuel commodities are experiencing prices surges at the moment. Moreover, disruptions in natural gas markets have usually been localized phenomena due to the pipeline-driven, regionalized markets. Are there, then, generalizations that can be drawn from the current natural gas outlook in Europe? Are there any lessons for Turkey here?
 Bloomberg.com. ‘Oil Drops After Scorching Rally as Markets Eye Iran Nuclear Deal’, 6 February 2022. https://www.bloomberg.com/news/articles/2022-02-06/oil-s-red-hot-rally-takes-a-breather-after-seven-weekly-gains.
 Business, Matt Egan, CNN. ‘Oil Prices Will Surge to $100 This Year, Goldman Sachs Warns’. CNN. Accessed 8 February 2022. https://www.cnn.com/2022/01/18/energy/oil-prices/index.html.
 ‘Factbox: What Are Europe’s Options in Case of Russian Gas Disruption? | Reuters’. Accessed 8 February 2022. https://www.reuters.com/business/energy/what-are-europes-options-case-russian-gas-disruption-2022-01-27/.
 ‘EU Seeks to Curb Gas Costs If Ukraine Crisis Hits Energy Supplies | Financial Times’. Accessed 8 February 2022. https://www.ft.com/content/907c85e0-7cbe-4eea-a725-db601895a84e.