FX.co ★ Ukrainian-Russian conflict, day 36. The "gas war" continues.

The key indices of the US stock market - Dow Jones, NASDAQ, and S&P 500 - ended Wednesday with a slight decline, but in general, continue to show strong growth. There was little news over the past day, so all instruments traded relatively calmly. In the foreign exchange market, the euro and the pound are making new attempts to recover against the dollar amid the growing likelihood of a peace agreement with Russia. Oil, after raising about $ 130 per barrel, fell to the level of $ 101. Gas has already risen to $ 5,514 and is growing in price again. It is the issue of gas that is now relevant for the whole world and, most importantly, for Europe. Recall that over the past week, the top officials of the Russian Federation and the European Union exchanged mutual verbal "jabs". The Russian Federation said that now the European Union will pay in rubles for gas supplies and if not, then there will be no gas. The European Union noted that the payment currency is spelled out in gas contracts and it will pay only in euros. The United States offers the EU to completely abandon the purchase of Russian gas and believes that they can provide Europe with the necessary volumes of LNG. The Yamal gas pipeline, which delivers gas to Europe, has not been pumping gas for several days.

The problem remains open, which is why gas is rising in price when many other instruments are being adjusted. As usual, there is the information and the state of things that are visible to everyone, and there is the "underwater part of the iceberg". In other words, the increase in the cost of gas does not affect revenues to the budget of the Russian Federation in any way. Gas can grow in price as much as you like, but only long-term supply contracts have been concluded between Russia and the European Union (as well as with other partners), in which prices are spelled out. At the moment, the gas price in these contracts is about $ 274 per 1 cubic meter. The real and actual price for 1 cubic meter of gas in the markets now exceeds $ 1,000. However, to conclude contracts at new prices, you must first cancel the old ones or wait for their completion dates. They will not be completed soon (2024 - not earlier), so it is even advantageous for Russia to set conditions for the European Union, hoping to persuade it to sign new agreements. But now it is far from a fact that there will be new agreements. Therefore, Moscow can assume that gas will no longer be sold to Europe, and for another two years it will be delivered there at prices five times lower than market prices. Consequently, in this state of affairs, it is even advantageous for Russia to unilaterally terminate the agreements with the European Union, even without the fear of any fines or penalties. Especially if China agrees to buy gas at market prices. After more than 6,000 sanctions were imposed against the Russian Federation, it is unlikely that the EU's demand to pay a fine for breaking the contract can frighten it. You can simply not pay it. Thus, the "gas war" is in full swing, and Europe is on the verge of an energy crisis.