We do not expect that many of our clients follow the market for natural gas on a daily – let alone hourly – basis. Had they done so, they would have seen some wild fluctuations in the price of wholesale gas in recent months, as conflicting stories about gas supplies have come out of Russia.

While clients may not follow gas prices, most will be aware that Russia supplies a significant amount of Europe’s gas: it is the biggest supplier to Europe, accounting for roughly 40% of all EU gas (In contrast Russia supplies just 1% of Britain’s gas.).

Clearly if you control 40% of any market – especially one as important as gas with winter approaching – you are in a position of strength. There were real fears that Russian leader Vladimir Putin was looking to exploit this in early November when gas flows in the Yamal-Europe pipeline between Russia and Germany started flowing eastwards (back towards Poland) rather than west to Germany.

As most readers will know – and as many will have seen reflected in their own domestic bills – the price of energy has risen rapidly lately. Why then has Russia not capitalised on this by supplying increasing amounts of gas to Europe? It has always portrayed itself as a reliable gas supplier to Europe, but some analysts believe Russia now sees the record prices – and Europe’s fears of a very cold winter – as an opportunity to pressure Europe into approving the controversial Nord Stream 2 pipeline.

This pipeline is expected to double gas supplies to Germany but – along with Nord Stream 1 – has proved highly controversial, with the US unhappy about increasing Russian influence in Europe, and the Ukraine (which is currently seeing a build-up of Russian troops on its border) angry at being bypassed by the pipeline. As has been repeatedly pointed out, the pipeline is more important to Germany than it is to Russia, which could just as easily sell its gas to China or other Asian countries.

So could Russia simply turn off Europe’s gas supplies? The theoretical answer is ‘yes’. At the moment – at least in the short term – the practical answer is ‘no’: Russia needs to sell its gas and it has a ready-made market in Europe.

Who knows, though, what the future may hold? This time last year, rumours were circulating about Vladimir Putin’s health, with stories that he might be suffering from Parkinson’s and that his family wanted him to step down. If Putin was replaced, then it is entirely possible that a new Russian leader would see China and the emerging Asian economies as a better long-term bet than Europe.

The German economy in particular would be hugely vulnerable to this – and it is the German economy that drives Europe. Whoever is in the Kremlin, Europe’s reliance on Russian gas is a simple fact of life. This is a story that we will hear again and again…