Gas hits $601 per 1,000 cubic meters in Europe, driven by supply uncertainty

As of February 7, natural gas prices in Europe surged by more than 2.5% in a single day.

The cost of futures contracts for February delivery at the Dutch TTF hub climbed to $601 per 1,000 cubic meters, Caliber.Az reports referring to foreign media.

Last week, gas prices in Europe recorded back-to-back increases. On January 30, prices rose by 5.8%, reaching $550 per 1,000 cubic meters — a sharp rise from $519.5 per 1,000 cubic meters at the previous trading session's close. The following day, January 31, prices surged further to $570 per 1,000 cubic meters, marking the highest level since October 30, 2023, with a daily increase of more than 3%.

The increase in gas prices follows the expiration of a five-year agreement on January 1 that allowed the transit of 40 billion cubic meters of Russian gas to Europe via Ukraine each year.

Ukrainian authorities refused to extend the agreement, prompting Russian President Vladimir Putin to accuse Kyiv of punishing Europe, noting that gas prices had already approached $500 per 1,000 cubic meters at that time.

Slovak Prime Minister Robert Fico has warned that Slovakia may consider lifting sanctions against Russia if Ukrainian President Volodymyr Zelenskyy does not reinstate gas transit through Ukraine.

Meanwhile, on January 27, reports emerged that the EU had blocked tank cars carrying liquefied hydrocarbon gas from Kazakhstan from crossing the border. European authorities expressed concerns that Russian gas could be entering the market disguised as Kazakh gas to circumvent sanctions.

Additionally, recent reports indicate that the EU has not included a full ban on Russian liquefied natural gas (LNG) in its 16th package of sanctions. The decision reflects the bloc’s continued dependence on Russian LNG, as it currently lacks viable alternative supply sources.

By Tamilla Hasanova