European gas prices spike
European gas prices have spiked by as much as 24 percent following Gazprom’s statement that it was suspending deliveries to Poland and Bulgaria starting Wednesday.
Benchmark Dutch futures traded at one point around 125 euros per megawatt hour.
Fatih Birol, the executive director of the Paris-based International Energy Agency, called Russia’s decision to cut off natural gas to Bulgaria and Poland the “weaponization of energy supplies,” adding that Russia’s decision “makes it clearer than ever that Europe needs to move quickly to reduce its reliance on Russian energy.”
The spike comes even as the weather turns warmer in Europe, lessening the demand for natural gas to heat homes and businesses.
Bulgaria says it can meet energy needs for another month
Bulgarian Energy Minister Alexander Nikolov has said that the country can meet the needs of users for at least one month, after it was given a one-day notice by Russia’s Gazprom that its gas supplies would be discontinued.
He said that gas was still flowing as he spoke Wednesday.
“Alternative supplies are available, and Bulgaria hopes that alternative routes and supplies will also be secured at E.U. level,” Nikolov said, referring to a European Union expert meeting due later Wednesday to plan the next steps. Bulgaria gets more than 90 percent of its gas from Russia, and officials have said they were working to find other sources, such as from Azerbaijan.
“Obviously gas is used as a political tool,” he said. “As long as I am minister, Bulgaria will not negotiate under pressure, Bulgaria is not for sale and does not succumb to any trade counterpart.”
Russia halts gas supplies to Poland and Bulgaria
Russia’s state-controlled natural gas giant Gazprom says it has “completely suspended” gas supplies to Poland and Bulgaria.
It said the move was due to the countries’ refusal to pay for the shipments in rubles, following President Vladimir Putin’s earlier demand that Europe do so.
Europe is heavily reliant on Russian energy and the decision to cut supplies to the two countries, members of the European Union and NATO, will be seen as an effort to ramp up economic pressure on the continent in a bid to deter support for Ukraine’s defensive fight.