Gas prices in Europe surge
Rising worries about energy supply shortages have driven European gas prices to their highest levels in 15 months, coinciding with Kiev's decision to shut down a pipeline it manages. Read Full Article at RT.com
TroibNews 
Following Ukraine’s recent decision to not extend a five-year gas transit agreement with Moscow, gas prices in Europe have surged to their highest levels since October 2023. This spike has been fueled by supply disruptions and compounded by forecasts of colder weather, intensifying concerns in an already strained energy market.
At the end of 2024, Kiev opted to terminate its five-year gas transit contract with Russian energy company Gazprom, resulting in the cessation of Russian pipeline gas supplies to several countries including Hungary, Romania, Poland, Slovakia, Austria, Italy, and Moldova. President Vladimir Zelensky has asserted that this termination is intended to diminish Moscow's energy revenues. In contrast, Slovakia and Hungary have accused him of intentionally instigating an energy crisis for political leverage.
The benchmark front-month contract at the Dutch TTF gas hub jumped over 4% on Friday, crossing $590 per thousand cubic meters, or €53.62 per megawatt-hour, continuing the upward trend observed in recent days.
Data indicates that EU gas storage levels have fallen to around 55%, significantly below the 72% recorded the same time last year and also below the five-year average of 62%. Analysts predict a rise in heating demand as temperatures are expected to further decrease in the coming days.
Following a dramatic cut in Russian gas imports—previously accounting for 40% of the EU's total supply—due to sanctions related to Ukraine and the 2022 Nord Stream pipeline sabotage, the bloc has turned to more expensive Liquefied Natural Gas (LNG) imports from the US and Norway. This shift has contributed to rising energy costs. Additionally, recent outages at Norway’s Gullfaks, Troll, and Asgard fields have further limited energy supplies to continental Europe.
Despite ongoing attempts to lessen dependence on Russian energy, EU member states are still importing unprecedented amounts of Russian LNG. In the first half of 2024, Russia became the EU’s second-largest LNG supplier, following the US, as reported by the Institute of Energy Economics and Financial Analysis.
US President Donald Trump had previously encouraged Brussels to increase purchases of American LNG, even threatening tariffs for non-compliance.
Amid escalating geopolitical tensions, the EU is expected to become more reliant on LNG, with current supply levels deemed “insufficient” for the European market “to balance and rebuild inventories for the next winter,” according to analysts at DNB Markets, as noted by The MarketWatch.
Currently, EU officials are in discussions regarding the potential resumption of Russian gas imports as part of a possible agreement to resolve the Ukraine conflict, according to a recent Financial Times report. However, there is caution about how this move might hinder ongoing efforts to diversify energy sources and mitigate reliance on Russian supplies. Moscow has also voiced doubts about the practicality of the reported plan.
Lucas Dupont for TROIB News
At the end of 2024, Kiev opted to terminate its five-year gas transit contract with Russian energy company Gazprom, resulting in the cessation of Russian pipeline gas supplies to several countries including Hungary, Romania, Poland, Slovakia, Austria, Italy, and Moldova. President Vladimir Zelensky has asserted that this termination is intended to diminish Moscow's energy revenues. In contrast, Slovakia and Hungary have accused him of intentionally instigating an energy crisis for political leverage.
The benchmark front-month contract at the Dutch TTF gas hub jumped over 4% on Friday, crossing $590 per thousand cubic meters, or €53.62 per megawatt-hour, continuing the upward trend observed in recent days.
Data indicates that EU gas storage levels have fallen to around 55%, significantly below the 72% recorded the same time last year and also below the five-year average of 62%. Analysts predict a rise in heating demand as temperatures are expected to further decrease in the coming days.
Following a dramatic cut in Russian gas imports—previously accounting for 40% of the EU's total supply—due to sanctions related to Ukraine and the 2022 Nord Stream pipeline sabotage, the bloc has turned to more expensive Liquefied Natural Gas (LNG) imports from the US and Norway. This shift has contributed to rising energy costs. Additionally, recent outages at Norway’s Gullfaks, Troll, and Asgard fields have further limited energy supplies to continental Europe.
Despite ongoing attempts to lessen dependence on Russian energy, EU member states are still importing unprecedented amounts of Russian LNG. In the first half of 2024, Russia became the EU’s second-largest LNG supplier, following the US, as reported by the Institute of Energy Economics and Financial Analysis.
US President Donald Trump had previously encouraged Brussels to increase purchases of American LNG, even threatening tariffs for non-compliance.
Amid escalating geopolitical tensions, the EU is expected to become more reliant on LNG, with current supply levels deemed “insufficient” for the European market “to balance and rebuild inventories for the next winter,” according to analysts at DNB Markets, as noted by The MarketWatch.
Currently, EU officials are in discussions regarding the potential resumption of Russian gas imports as part of a possible agreement to resolve the Ukraine conflict, according to a recent Financial Times report. However, there is caution about how this move might hinder ongoing efforts to diversify energy sources and mitigate reliance on Russian supplies. Moscow has also voiced doubts about the practicality of the reported plan.
Lucas Dupont for TROIB News
