Europe gas prices soar 30% in 2 days as Russia cuts Nord Stream 1 supply

Ukraine forces hit key bridge in Russian-occupied south

European gas prices have surged 30 per cent in two days after Russia deepened supply cuts to the continent in Moscow’s latest attempt to weaponise energy supplies.

Futures contracts for delivery next month tied to TTF, the European benchmark wholesale gas price, jumped 20 per cent on Tuesday to breach €210 per megawatt hour, the highest level since early March, a day after Russia warned of lighter flows on the largest pipeline supplying the region. Prices are more than 10 times higher than the average between 2010 and 2020.

Russian state-backed energy group Gazprom on Monday said flows on the Nord Stream 1 (NS1) pipeline would plummet to 33mn cubic metres from Wednesday because of turbine maintenance issues. That would amount to a fifth of the pipeline’s capacity and half of current levels.

“Everyone in the market was expecting Russian volumes to drop,” said James Huckstepp, manager of Emea gas analytics at S&P Global Commodity Insights, a consultancy. “But the market wasn’t expecting flows to fall this quickly.”

The rise in gas prices came as EU ministers struck a watered-down deal on Tuesday to reduce gas consumption by 15 per cent over winter with exemptions for certain member states less dependent on Russian gas.The higher gas prices indicate the mounting pressure on Europe to seek alternative supplies to keep homes warm and industry operating through the coming winter. Failing that, politicians are warning that gas will have to be rationed for businesses, factories and even households.

Russia's Gazprom on Wednesday halved the amount of natural gas flowing through a major pipeline from Russia to Europe to 20 per cent of capacity.

It's the latest reduction to Nord Stream 1 that Russia has blamed on technical problems, but Germany calls a political move to sow uncertainty and push up prices amid the war in Ukraine.

Meanwhile, the Ukrainian military used a US-supplied precision rocket system to deliver a morale-lifting knockout punch Wednesday to a bridge Russia used to supply its forces in an occupied region of southern Ukraine.

Ukrainian artillery struck the Antonivskyi Bridge late Tuesday, the deputy head of the Moscow-appointed administration for the Kherson region, Kirill Stremousov, said. The bridge, which crosses the Dnieper River in the southern region, was still standing Wednesday, he said.

Ukraine aims for IMF loan Ukraine aims to strike a deal for a $15-$20 billion programme with the International Monetary Fund before year-end to help shore up its war-torn economy, the country's central bank governor Kyrylo Shevchenko told Reuters.