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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Europe’s Gas Prices Soar 60% To Record High As Buyers Shun Russia

  • Traders are steering clear of deals with Gazprom’s trading unit.
  • The front-month Dutch TTF natural gas futures soared by 60 percent to over $215 (194 euro) per megawatt-hour on Wednesday.
  • Saxo Bank's Ole Hansen: European gas “has entered demand destruction territory,”.

The gas price at the Dutch TTF hub, the benchmark gas price for Europe, surged to a record high early on Wednesday amid concerns about supply disruptions from Russia and traders steering clear of deals with Gazprom’s trading unit.

The front-month Dutch TTF natural gas futures soared by 60 percent to over $215 (194 euro) per megawatt-hour, hitting an all-time high in early trade in Amsterdam on Wednesday, while the front-month UK gas contract jumped by 33 percent. The market is increasingly apprehensive about a potential disruption to natural gas supply—be it additional sanctions targeting Russia’s energy, a possible Russian retaliation to sanctions by halting pipeline supply, or a direct hit on a pipeline carrying gas from Russia via Ukraine.

European gas “has entered demand destruction territory,” Ole Hansen, Head of Commodity Strategy at Saxo Bank, said on Wednesday, with prices 10 times higher than the latest average. The gas price for winter 2022/23 is also blowing out, Hansen added.

European gas prices have been highly volatile since Russia invaded Ukraine last week, and now traders and buyers in Europe seem to be staying away from deals with the trading unit of Russian gas giant Gazprom, sources with knowledge of the matter told Bloomberg on Wednesday.

Companies and power and gas traders could also begin unwinding previously agreed contracts and banks could shun business with Gazprom and its affiliates, according to Bloomberg.

“The highly unpredictable geopolitical situation and risk for further escalation and new sanctions are likely to support prices further,” Refinitiv analysts told Reuters on Wednesday.

Russian LNG is also being shunned. According to vessel-tracking data from Refinitiv Eikon cited by Reuters, several LNG tankers from Yamal LNG in Russia have switched status to “For Orders” in the past days, from previously signaling France and the UK as destinations. 

Meanwhile, as of early on Wednesday, Russian pipeline gas flows to Europe continued as normal.  

By Tsvetana Paraskova for Oilprice.com


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  • Mamdouh Salameh on March 02 2022 said:
    Buyers who are shunning Russia’s gas are cutting their noses to spite their faces to quote the proverbial saying. As a result gas prices in Europe are skyrocketing to unheard of levels. The ones who are suffering are the Europeans who are paying very hefty bills for energy and electricity and the EU’s economy which will be paying a huge price in reduced economic growth this year.

    In additions to gas supply shortages around the world and cut-throat competition between the EU and the Asia-Pacific region for whatever available supplies, the combined LNG exports of the United States, Qatar and Australia and also Norway’s gas exports couldn't replace the 200 billion cubic metres (bcm) of Russian piped gas supplies and 15-16 million tonnes of LNG. Only Russia can. Moreover, the bulk of LNG exports are already contracted for in the Asia-Pacific region.

    Russia could easily shift the bulk of its gas and LNG exports to China, the world’s largest e energy market.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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