Gas flow from Russia vs PSV price

Between January and February 2022, gas flow from Russia (Tarvisio) was very volatile, reaching several times the low of 20 mln smc /day, which basically represents the volume related to long-term take-or-pay contracts. In March, despite the outbreak of the armed conflict between Russia and Ukraine, gas flow from Russia increased. The interesting fact is that as gas flow increased, the price at the PSV (spot) increased just as the price drop in the second half of December was followed by a reduction in flow.

In essence, the fall in prices in the second half of December, linked to the strong increase in LNG imports to Europe, made the import of spot volumes from Russia less profitable. On the contrary, the outbreak of the war and the consequent fears for possible interruptions in Russian gas supplies has pushed speculation upwards, leading to the only apparently contradictory condition of both rising volumes and prices. It is clear that at present there are market operators who are making extra profits.

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