The markets are reacting to the Russian gas ban.
(Photo: imago images/Future Image)
Dusseldorf Gas has stopped flowing from Russia to Poland and Bulgaria since Wednesday. Because the two EU countries did not meet their payment obligations, deliveries were stopped with immediate effect, the Russian state-owned company Gazprom said. The Federal Ministry of Economics said that the supply in Germany was guaranteed.
The gas price reacted immediately to the new situation on the market on Wednesday and jumped by almost 20 percent to 118 euros per megawatt hour (MWh) on the Dutch TTF exchange. This is the highest level in almost four weeks. This means that natural gas is now almost seven times as expensive as it was in April 2021.
In the course of the morning, prices relaxed again somewhat. This is mainly due to the fact that no physical shortage is to be expected, say experts from Energy Brainpool. The market remains extremely volatile.
Fears of an energy crisis are also pushing up oil prices. However, only moderately. The North Sea variety Brent and the US oil WTI rose in price by a little more than one percent to 106.33 and 102.99 dollars per barrel on Wednesday. “The market is extremely driven by the news situation,” says Howie Lee, economist at OCBC Bank.
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The government in Moscow had warned Europe that gas supplies could be interrupted if future payments were not made in rubles. So far no money has been received for the deliveries in April, Gazprom said in a statement on Wednesday. “In the event of unauthorized withdrawal of Russian gas from volumes intended for transit to third countries, transit supplies will be reduced by the volume withdrawn,” it said.
“Today’s events may provide additional incentive for the EU, and Germany in particular, to find a way to find a ruble payment mechanism,” Goldman Sachs analysts wrote on Wednesday. A stop in gas deliveries would therefore have significant economic effects that went far beyond those of Poland or Bulgaria.
>> Read also: The war and its devastating consequences: All of Eastern Europe is threatened with a massive recession
In the event of a complete halt to Russian deliveries to Europe, the experts expect gas prices of up to EUR 200 per MWh. However, the analysts remain confident and are not raising their price forecast of EUR 104 per MWh for the summer. In the third quarter, they are even anticipating a drop to EUR 85 per MWh.
Von der Leyen condemns delivery stop
EU Commission chief Ursula von der Leyen condemned the Russian delivery stop for Poland and Bulgaria on Wednesday. Gazprom’s announcement is another attempt by Russia to use gas as a tool of extortion, von der Leyen said in a statement. “This is unjustified and unacceptable. And it shows once again the unreliability of Russia as a gas supplier,” said von der Leyen.
More: Who will have to pay in the future when energy prices explode.
