2024-08-09 15:47:09
On Tuesday, August 6, the Ukrainian army invaded the Kursk border region of Russian territory, through which a gas pipeline to Europe passes, which had an immediate impact: gas prices on the market rose sharply, reaching record levels. Two days later, they reached the level since the beginning of the year. The European gas benchmark Rotterdam TTF (Netherlands) futures contract (September) rose by 4% to 40 euros per megawatt hour (MWh), rising to 40.475 euros during the session, the highest price since December. In three days, it rose by about 9%.
Although we are still far from the average of €242 per MWh reached in August 2022 (six months after the outbreak of the war in Ukraine and during the winter when stocks were being rebuilt), these prices are still high. The market reacted to the takeover of the Sudja gas terminal by Kiev’s military, the nerve centre of the network that still delivers Russian gas through Ukraine to Europe.
Since the closure of the Yamal-Europe pipeline through Poland in May 2022, this pipeline is the only source of direct Russian gas supply to Europe. In addition to this, there is the Turkish Stream, which was launched in 2020, which connects Russia to Turkey under the Black Sea and from there to customers such as Bulgaria and Serbia through another pipeline. On the other hand, the Nord Stream 1 and 2 pipelines connecting Russia and the Baltic Sea north of Germany have been paralyzed since they were sabotaged in September 2022, and it is still unclear who is behind them.
Overreacting
Ukrainian gas pipeline operator OGTSOU said Russian gas shipments to the Old Continent fell to a record low in June, denouncing “Gas blackmail” Moscow deprived him of rights related to the passage of precious elements. The agreement signed with Gazprom in 2019 is due to expire at the end of this year, and Kiev has announced that it will not be extended.
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