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Friday, August 19, 2022

Europe Gas Prices Surge Amid Fears of Russian Supply Cuts

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The price of natural gas in Europe has climbed to its highest level since March amid fears of a further reduction in Russian supplies.

It comes after it was announced that another turbine at the Nord Stream 1 pipeline would be shut down.

On Tuesday, August futures on the TTF trading hub in the Netherlands reached $2,020 per thousand cubic meters or €188.68 ($192.5) per megawatt-hour in household terms.

The increase follows a statement by Gazprom on Monday that a second Siemens turbine at the Nord Stream 1 pipeline will be disabled and overhauled.

As a result, supply through the route will not exceed 33 million cubic meters per day from July 27, corresponding to 20% of the pipeline’s capacity.

This is a further cut from the reduction to 40% capacity last month that Gazprom said was due to a sanctions-related delay with the return of another turbine from repairs in Canada.

European gas prices have nearly tripled this year, having peaked at a historic high of $3,900 per thousand cubic meters in early March after Russia launched a military operation in neighboring Ukraine.

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