- Russia is choking off Europe's natural gas supply, cutting the flows through the Nord Stream 1 pipeline to 20%.
- Gas prices finally eased Thursday after 6 days of gains, but have soared 145% since the start of June.
- Europe's energy crisis could last until 2025, according to Goldman Sachs strategists.
Europe's natural gas prices finally eased on Thursday after six straight days of gains, but the continent's energy crisis is likely to last until 2025, according to Goldman Sachs.
Benchmark Dutch TTF natural gas futures eased 0.35% to below 205 euros ($207) per megawatt hour on Thursday after soaring nearly a third over the past week and 145% since the start of June.
The crisis has been driven by Russia, which cut flows of gas through the Nord Stream 1 gas pipeline to 20% of capacity in an attempt to undermine its political opponents as the war in Ukraine continues.
Goldman Sachs strategists said it could take years for heavily-reliant countries such as Germany to make up for the natural gas shortfall.
"We expect European gas prices will ultimately be driven higher once again during summer 2023, as price-driven demand destruction becomes top of mind once more," a team led by the bank's head of natural gas research Samantha Dart said in a recent research note. "A more sustained lower-price environment is not likely in Europe in our view until 2025."
Nord Stream 1 is a 759-mile pipeline that supplies Germany with around 26% of its gas imports, according to BBC News. Germany suspended certification of a second Nord Stream pipeline in February as Russia prepared to invade Ukraine.
Russian president Vladimir Putin announced last week that Nord Stream 1's capacity would fall to 20% as it waits to re-install a repaired turbine that has been shipped over from Canada.
"While we expect Nord Stream 1 flows to be restored back to a 40% run rate once the repaired turbine is in place, we believe Russian supply uncertainty remains high," Goldman Sachs strategists said.
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