The Dutch TTF forward contract on ICE is worth over €127.50 per megawatt hour. That is the highest level since April 1.
President Putin demands that payment for his gas by ‘unfriendly’ buyers, meaning European member states that support invaded Ukraine, be in rubles. The EU says that this is a breach of contract. Poland is now being hit by a restriction Tuesday and today on gas from Gazprom, according to market followers, because of its particularly outspoken criticism of Russia’s war in Ukraine. On Tuesday evening, Bulgaria also reported that it will no longer receive gas from Gazprom.
Energy as a weapon
Market analysts say the cessation of gas shipments through Moscow shows that “energy as a weapon” is being used, and that the conflict has now spread clearly beyond Ukraine’s borders.
“Any buyer who declines the new payment procedure runs a very real risk of reduced deliveries,” researcher Katja Yafimava of the Oxford Institute for Energy Studies told Bloomberg on Wednesday.
The move also creates additional demand, as Poland and Bulgaria have to buy gas. Liquefied gas (LNG) is the first to be considered for this. Supply in Asia has actually been reduced this week in an already over-stressed market.