Russia announced sanctions on 31 European energy companies on Wednesday—a move that has pushed gas prices higher in Europe, according to The Wall Street Journal (subscription).
The impact: The companies sanctioned included Gazprom Germania and EuRoPol Gaz, owner of the Polish stretch of the Yamal–Europe pipeline that transfers Russian gas to Germany.
- “The Russian move cuts gas deliveries to Germany by 10 million cubic meters a day, or around 3% of annual Russian gas deliveries to the country, [German Economy Minister Robert] Habeck said.”
The price jumps: “Dutch gas futures, the benchmark in northwestern Europe, jumped 18% Thursday, while gas prices in the U.K. gained 34% and German power prices leapt 15%.”
- “Though gas prices are below their March highs, they remain more than four times as high as a year ago, adding to inflationary pressures that are pushing central banks to tighten monetary policy.”
What they’re saying: Habeck said, “The situation is escalating, insofar that the use of energy as a weapon is being realized.” He further encouraged Germans to reduce gas consumption and said that the gas lost from Russia’s sanctions can be sourced from other suppliers.
Expert take: Tom Marzec-Manser, a gas analyst at ICIS, said the Russian sanctions at this point are largely symbolic and ultimately won’t have a major effect on gas supplies.