European gas prices have surged 30 per cent in two days after Russia deepened supply cuts to the continent in Moscow’s latest attempt to weaponise energy supplies.
Futures contracts for delivery next month tied to TTF, the European benchmark wholesale gas price, jumped 20 per cent on Tuesday to breach €210 per megawatt hour, the highest level since early March, a day after Russia warned of lighter flows on the largest pipeline supplying the region. Prices are more than 10 times higher than the average between 2010 and 2020.
Russian state-backed energy group Gazprom on Monday said flows on the Nord Stream 1 (NS1) pipeline would plummet to 33mn cubic metres from Wednesday because of turbine maintenance issues. That would amount to a fifth of the pipeline’s capacity and half of current levels.
“Everyone in the market was expecting Russian volumes to drop,” said James Huckstepp, manager of Emea gas analytics at S&P Global Commodity Insights, a consultancy. “But the market wasn’t expecting flows to fall this quickly.”
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