July started with everyone’s eyes on the referendum held in Greece, where the Greeks responded with an unequivocal “no” to the proposal in accordance with the EU on June 25th.
Taking the Greek situation as the starting point, here in Magnus we decided to analyze the consequences that might occur in the Spanish energy markets with the possibility of Greece leaving the Eurozone.

First of all, Greece’s economic situation has to be contextualized within the Eurozone. Germany is the most relevant country in this sense, followed by United Kingdom, France and Italy, while Malta is undoubtedly the smallest economy of the region. From this perspective, Greece represents less than 2% of European GDP.

However, energy imports are on the list of products that might be affected the most by the possible default of Greece and its departure from the Eurozone. This will happen since imports of gas and oil represent 34% of total imports of the country, according to the international trade center of Geneva.

For this reason, we consider the question: how could the exit of Greece from the euro group would impact the Spanish energy market?

Euro – currency

Oil is quoted in dollars, so the appreciation of this currency against other currencies in which oil is bought from other countries, means more money needed to buy a barrel of crude. This increase of the ‘price’ in other currencies hurts demand for oil.

The ‘Grexit’ could be something harmful although moderate in the long-term markets since it creates doubts about the euro stability. However, in the short term, there are some mitigating effects as the fact that Greece has always been an exception within the Eurozone as well as the small size of its economy. It must also take into account that this period is quite suitable for good economic times affecting the Eurozone, and especially the peripheral countries.


Greece itself consumes less than 0.4% of global crude and produces fewer than 9,000 barrels per day.

The concern for oil markets centers around two factors: the consequences for economic stability and growth in Europe, and the strengthening of the US dollar.

‘Grexit’, however, threatens the breakup of the Eurozone itself, a major global economy and consumer of 9.7 million barrels of oil per day.


It is important to remark that gas formulas in Spain are indexed to both, oil price and currency exchange, so any event that affects them will also affect the price of Gas.

Regarding interconnections: Europe could lose interest in TAP (Trans Adriatic) pipeline projected for 2017 which is planned to operate across Bulgaria, Greece and Turkey. If Greece goes back to the Drachma, it could become even a less competitive exporter to the rest of European partners.

CO2 –Right Emissions

Any model of a ‘Grexit’ would have a slightly bearish effect for European emission rights prices. Given the small size of Greece in the context of the European Union, any effect would be indirect through economic impacts rather than specific issues of the ETS (Emissions Trading System) of the European Union.

On the other hand, the MSR (Market Stability Reserve) will not begin to run until 2019, probably too late to deal with the effects of a possible departure of Greece in the year 2015.

In conclusion, a ‘Grexit’ not only affects each commodity separately, but it could undermine attempts to achieve a European energy sufficiency. Moreover it will affect the development of energy projects, as well asprojects to prevent climate change. So now we can only wait to know the results of the forthcoming negotiations, if negotiating parties will eventually come to an agreement and which are going to be the conditions so energy markets can be analyzed with less uncertainty.

Sonia Díaz | Energy Consultant

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