Britt-Marii Pung

The decision made over the weekend by the OPEC oil cartel to limit crude oil production caught the markets by surprise, and the oil price went up by 6% to 85 USD/bbl on Monday. According to analysts, if that decision is upheld, oil prices could go up to 110 USD/bbl by the end of the year. Such an increase in oil prices would inevitably lead to natural gas prices going up as well.

Russia’s energy war against Europe made Norway one of the most important gas suppliers in the region, expected to remain in this role for years to come. In the aftermath of the Nord Stream gas pipeline explosions in the fall, energy security will be taken to the next level as the critical energy infrastructure is going be guarded by NATO forces.

Due to the end of the heating season, windy weather and the high level of gas reserves, the electricity exchange price remains at a lower level than the Estonian universal service price. The production price for universal service is determined by the Competition Authority, while the component with the greatest impact is the high CO2 quota price.

The sharpest peak of the energy crisis may be over for this winter, but when preparing for the next heating season, China, which is gradually opening up its economy and therefore needs more natural gas, may start to influence energy prices significantly more than Russia.

Probably for the first time this winter, the incoming cold wave is welcomed with calm hearts: security of supply is guaranteed, energy prices remain stable and the threat of power cuts has passed.

During the last weeks, the price of electricity has remained at a constant level and the price of natural gas has dropped significantly thanks to favourable weather conditions. However, according to experts, the price of gas will move up again as the year progresses, but how high and how quickly will depend on the pace at which reserves will be restored.