(Berlin=Yonhap News) Correspondent Kim Gye-yeon: As the war in Ukraine intensifies, European natural gas prices are fluctuating again.
On the 21st (local time), the December futures for natural gas closed at 48.640 euros per megawatt-hour (MWh), up 3.94% from the previous session, according to the Netherlands TTF gas futures exchange.
This is the first time in a year that natural gas futures have exceeded 48 euros at the TTF exchange since November last year.
European natural gas prices soared over 300 euros (about 440,000 won) in August 2022 due to supply disruptions from the Ukraine war but dropped to the early 20-dollar range by February this year.
In August, prices briefly surged when Ukraine invaded Kursk, Russia, where the last measuring station of the Urengoy-Pomary-Uzhgorod pipeline is located. Recently, the intensified war situation, including North Korean military dispatch and the lifting of the U.S. restriction on ATACMS missile use, has caused prices to rise daily.
Supply concerns were stoked in the afternoon when news broke that Gazprombank, a financial subsidiary of Russia’s state energy company Gazprom, was added to U.S. sanctions. Gazprombank has been intermediating natural gas trades between Russia and Europe by converting euros received into rubles for Gazprom payment since the war began, following the Russian government’s ruble payment policy.
Florence Schmidt, an energy strategist at Rabobank, said, “This could lead to a suspension of some transactions, resulting in supply delays and reductions.”
Europe has steadily reduced its reliance on Russian natural gas since the outbreak of the Ukraine war. However, some Central and Eastern European countries, like Austria and Hungary, still import gas from Russia.
Ukraine has declared that it will no longer operate the Urengoy pipeline, which passes through its territory, after its contract expires on December 31 this year. Meanwhile, concerns about supply reduction have intensified as Gazprom halted gas transportation on the 16th due to a payment dispute with the Austrian company OMV.
Maria Zakharova, a spokesperson for the Russian Foreign Ministry, stated that the supply halt is justified and that they will not provide gas to Austria on a charitable basis. As of last year, Austria imported 80% of its natural gas from Russia.
European countries have increased imports from the U.S. and Norway after the Ukraine war began, but have not completely eliminated Russian energy. TASS reported that according to Eurostat, the EU’s statistical office, and its own data, the EU’s imports of Russian pipeline gas in September reached their highest level since February last year, worth 840 million euros (about 1.2 trillion won).