22:49     07 August 2024    

The European gas market is witnessing a sharp increase in prices, spurred by reports of Ukrainian forces capturing a key transit point in Russia’s Sudzha. These developments have driven gas prices to their highest levels this year. According to Bloomberg, benchmark gas futures surged by 5.8%, reaching €38.79 per megawatt-hour. This spike follows reports from unofficial sources, such as the Russian military blog "Rybar," which claims that the Armed Forces of Ukraine have taken control of a gas intake point near the city of Sudzha on Russian territory. However, no official confirmation has been issued. With fighting intensifying along the border with Ukraine, traders are on alert for potential disruptions at the transit point. Any interruption in gas supplies could lead to further price surges, adversely affecting consumers and industries across Europe, which continues to recover from the energy crisis triggered by the war. The Ukrainian gas transmission system operator announced that transit deliveries on Thursday would proceed as normal. However, it remains uncertain whether Gazprom will continue its supplies through Sudzha if its capture is confirmed. Dutch gas futures, a benchmark for European gas prices, rose by 5.3% to €38.62 per megawatt-hour by 17:53 local time in Amsterdam. Since the start of the storage season in April, contract prices have increased by approximately 40%. Sudzha remains the only operational point for receiving Russian pipeline gas into Europe via Ukraine, following the decommissioning of another major point, Sokhranovka, in May 2022. In 2023, about 14.65 billion cubic meters of gas were transported through the Urengoy-Pomary-Uzhgorod pipeline, accounting for roughly half of Russia’s gas exports to Europe.