Vulnerability Assessment of the Natural Gas Financial Market Against the Backdrop of the European Energy Crisis

Abstract

The European energy crisis revealed the fragility between energy markets and the financial system. The Russia–Ukraine conflict and supply cuts drove extreme volatility in natural gas prices, with Germany, the most dependent on Russian gas, facing severe shocks. Uniper, the country’s largest gas importer, suffered soaring procurement costs while price controls limited revenues, leading to a liquidity crisis and eventual state takeover. This study reviews the causes of the crisis and applies a modified Z-score model with Monte Carlo simulation to Uniper’s financial data from 2019–2023 to assess the impact of price regulation on debt-servicing capacity. Results indicate that price shocks and policy intervention jointly weakened financial health, as cash flow deficits and worsening leverage became key risk drivers. The modified model better reflects the fragility of energy firms under regulation compared to the traditional model, while Monte Carlo simulation shows a persistent probability of high-risk outcomes even after government rescue. The findings confirm financial fragility theory, suggesting that interventions may delay but cannot eliminate risks, and offer insights for balancing energy security with financial stability in China.