European gas prices shot up nearly a third on the leading gas exchange in Amsterdam this morning following the decision by Russian state gas group Gazprom on Friday to suspend deliveries via the important Nord Stream 1 pipeline. Gazprom points to technical problems. On Wednesday, the pipeline between Russia and Germany via the Baltic Sea was shut down for three days due to maintenance.
After a few minutes of trading, the gas price in Amsterdam had fallen slightly, but it was still about a quarter higher than Friday when the stock exchange closed. The Dutch TTF futures for delivery in a month, at around 8.10 am, they traded at 270 euros per megawatt hour (+26 percent). Last week, the gas price in Europe had fallen by almost 40 percent. At the end of August, record values were reached of around 350 euros per megawatt hour.
There are fears that Gazprom will not resume gas deliveries via Nord Stream 1 at all. Moscow previously cut gas supplies to 20 percent of maximum capacity. Gazprom also cited technical problems as the reason for this. Russia still sends gas to Europe via a route through Ukraine, but that is not enough to compensate for the halted deliveries by Nord Stream 1.
European leaders see turning off the Russian gas tap primarily as a political means of pressure. The European Union has imposed numerous sanctions against Russia over the war in Ukraine, and this would be in retaliation.
The earlier announcement that Nord Stream 1 had to close due to necessary maintenance was received with skepticism in Europe. Klaus Müller, the boss of the German energy supply regulator Bundesnetzagentur, found that explanation incomprehensible from a technical point of view.
“An end to Russian gas supplies to Europe means that the German and Eurozone economies will immediately plunge into recession,” said an analyst with investment bank Liberum Capital. European stock markets are expected to open with significant price losses today due to concerns about the energy crisis.
European countries are taking measures to help households and businesses with soaring inflation and energy prices. For example, Germany announced yesterday that it would allocate more than 65 billion euros for additional support measures. Measures were also taken this weekend in Sweden and Finland to deal with the energy crisis.
Zelensky: “Russia wants to deal a decisive blow to European energy market”
Gazprom sends gas to Europe via a different route
It is becoming difficult for many to keep paying the bills. What can be done about that? News anchors Stef Wauters and Birgit Herteleer will find out tonight in ‘Het Grote Gelddebat’, Monday 5 September at 10.05 pm on VTM.
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