According to Goldman Sachs, the tightness in European gas markets will linger for another three years. While the current shortage in European natural gas was partly driven by transient drivers, such as exceptionally cold weather in the region supporting gas
demand in 1H2021, it also reflects structural drivers that will only intensify in the coming
“As we near February, approaching the end of the heating season in the Northern Hemisphere, it’s tempting to think that the European energy crisis is over, especially with record-high inflows of LNG from Asia into Europe. We view such a take as premature. This is not only because near-term risks to European gas supplies persist, but also because the uncertainty around European gas supplies extends through the coming summer - and likely through 2025. This means that, while not our base case, the tightness in European gas balances that drove prices to historic levels late last year to drive industrial demand destruction might repeat itself over the next few years,” the release reads.