Q3 2022: Europe’s energy‑security crisis

I. Market Summary

The third quarter was dominated by Europe’s energy‑security crisis. Dutch TTF gas prices exploded to an all‑time high of €319 / MWh on 26 August, while plans for an unprecedented G7 price cap on Russian crude signalled geopolitical intervention unprecedented since the 1970s.  

II. Gas crisis peaks

• Record prices. Extreme LNG bidding wars and curtailed Russian pipeline flows drove European gas benchmarks to levels equivalent to US $550 / bbl of oil.

• Nord Stream sabotage (26 Sep). Three explosions disabled both Nord Stream 1 strings and one Nord Stream 2 leg, releasing an estimated 300 kt CO₂‑eq of methane and eliminating any short‑term prospect of Russian pipe supply to Germany.

III. Oil geopolitics—Price‑cap architecture emerges

On 2 September G7 finance ministers agreed to impose a shipping/insurance ban on Russian oil sold above an as‑yet‑unspecified cap, targeting implementation by 5 December. Moscow responded that it would refuse to sell to any cap‑participating country, raising fears of physical supply disruption.

IV. Market balances & price action

Brent remained range‑bound US $88–105 / bbl as SPR releases from the United States and product demand destruction offset fears of supply loss. Deferred WTI prices slid into contango, reflecting rising U.S. crude stocks and refinery maintenance.

V. Take‑aways for operators

Gas price volatility now dictates European refinery margins and petrochemical economics; integration strategies should account for cross‑commodity risk.

Shipping and trading divisions must prepare compliance frameworks for price‑cap attestations well before the December effective date.