Gas prices in Europe are being pushed up this year by supply cuts from Russia. The situation surrounding Russian gas supplies became more complicated when Russia launched an attack on Ukraine in February and the European Union enacted a series of anti-Russian sanctions in retaliation. On Monday, the price of gas rose significantly in response to the suspension of supplies through the Nord Stream 1 gas pipeline.
Last week, the European Union met its goal of filling 80 percent of its gas reservoirs by November ahead of schedule. According to data from Gas Infrastructure Europe (GIE), storage tanks in the EU were almost 82 percent full on Sunday. In Germany, which is the largest consumer of gas in Europe, the storage capacity was more than 86 percent, in the Czech Republic approximately 82.5 percent.
According to GIE data, neighboring Poland’s reservoirs are almost 100 percent full, and Slovakia is close to 80 percent. The worst situation in the European Union is Latvia, where the reservoirs are filled to about 50 percent. Ukrainian reservoirs are almost 28 percent full.
Russian gas company Gazprom said last week that it will keep the Nord Stream 1 gas pipeline out of service until defects found during maintenance are fixed. Nord Stream 1 transports gas from Russia to Germany along the bottom of the Baltic Sea and is the main route for Russian gas supplies to the European Union. On Monday, Kremlin spokesman Dmitry Peskov said that Nord Stream 1 would remain out of service, until the West lifts anti-Russian sanctions imposed after Russian troops invaded Ukraine.
Ratings agency Fitch said the pipeline’s supply disruption came four months earlier than it had expected. However, she added that Europe had prepared for this eventuality. EU steps including increasing alternative gas supplies and a planned 15 percent reduction in consumption should help avert acute gas shortages, she said. However, the agency noted that there are many uncertainties surrounding the winter gas market in Europe, including how cold the winter will be, how high liquefied natural gas (LNG) supplies will be and how the war in Ukraine will develop.