Brewin Dolphin: Putin keeps Europe guessing on gas

Dire economic consequences

As heatwaves hit many parts of Europe, it is hard to envision the scenario of a freezing winter with an insufficient supply of gas and prohibitive costs to heat up homes and offices.

Before the war in Ukraine, the scenario of a complete gas shutoff from Russia to Europe was unfathomable. However, this is a tail risk that is garnering increasing caution from authorities, economists, and financial markets. In June 2022, the International Energy Agency (IEA) warned that Europe needs to prepare for a total halt in Russian gas and widespread curtailment in gas usage would be necessary. It is a nightmare scenario and leaves Europe in an extremely vulnerable position, economically, politically and socially. The asymmetric growth outlook in Europe is a key reason why we h...