Russia closes valves, natural gas prices climb up
Natural gas prices on the spot market in Europe have risen by 35 percent after Russia cut off the flow of the Nord Stream 1 pipeline. After Russia cut off the gas in the Nord Stream 1 gas pipeline, which supplies the bulk of the gas flow to Europe, there was a big jump in European gas prices. Experts believe that the energy crisis could push major economies in the region into recession.
With the decision announced by Gazprom late on Friday, the price of the nearest natural gas traded at the Netherlands-based virtual natural gas trading point TTF, which is the benchmark price for European natural gas, increased by 35 percent on the first day of the week.
On Friday, before Gazprom’s announcement, this price had fallen by 12 percent to over 2,283,euros per 1,000 cubic meters. In the first trading hours after the news, future contracts again rose to the level of 3 thousand 85 euros per 1000 cubic meters.
RUSSIA STOPS GAS
In a written statement made by Gazprom on Friday, it was stated that malfunctions had been detected in a turbine on Nord Stream, which was taken into maintenance on August 31 and was expected to be operational again next day. Although the Russian company said that the flow had stopped due to a malfunction, the announcement came after the news that the G7 countries would impose a price ceiling on Russian oil.
The day before, the G7 countries had agreed to apply a price restriction mechanism to Russia’s oil exports. With this move, the G7 countries had aimed to reduce the Kremlin’s ability to finance the war in Ukraine and protect consumers in the face of rising energy prices.
CRITICAL MEETING ON FRIDAY
European energy ministers will discuss radical proposals to reduce electricity prices at a special meeting this Friday, including an upper limit on natural gas prices and the suspension of trading in energy derivatives.
