Flows of natural gas from Russia on the Yamal-Europe pipeline via Belarus to Poland and Germany have been volatile and mostly running east from Germany to Poland since the end of December.
Volatile and lower than typical Russian natural gas supply to Europe in the fourth quarter of 2021 contributed to the energy crisis in Europe, which had its gas storage levels at the lowest in a decade at the start of the winter. As a result, gas and power prices spiked in Europe. But not as much as the natural gas price surge in recent days, after Russia invaded Ukraine last week.
Europe’s benchmark natural gas price surged on Thursday morning to hit a new record-high for a second consecutive day, trading at the equivalent of $360 per barrel oil, as concerns over the disruption of Russian gas supply mount.
The gas price at the Dutch TTF hub, the benchmark gas price for Europe, jumped early on Thursday in Amsterdam to trade at $221 (199.99 euro) per MWh, which was a new all-time high. This beat Wednesday’s record of $215 (194 euro) per megawatt-hour.
After the Russian invasion of Ukraine, gas supply from Russia has been closely monitored by the market and traders, while European countries and the European Union said they would accelerate efforts to quickly replace as much Russian gas supply as possible.
The European Union could be able to reduce its reliance on Russian natural gas by more than one-third within a year by turning to other suppliers and using other energy sources, the International Energy Agency (IEA) said on Thursday.
“Nobody is under any illusions anymore. Russia’s use of its natural gas resources as an economic and political weapon show Europe needs to act quickly to be ready to face considerable uncertainty over Russian gas supplies next winter,” the IEA’s Executive Director Fatih Birol said in a statement.