EU GAS PRICES RISE SIGNIFICANTLY AFTER RUSSIAN SUPPLY DISRUPTIONS REPORT

Gas prices in Europe, for the first time since November 2023, exceeded $500 per 1,000 cubic meters after OMV, which won the case against Gazprom Export, warned of possible disruptions in supplies from Russia. The price subsequently fell slightly.

Gas prices in Europe hit their highest level last year after Austrian gas group OMV warned of possible supply disruptions from Russia, the Financial Times reports.

According to the ICE exchange, on November 14, the price of gas in the European Union, for the first time since the end of November 2023, exceeded $500 per 1,000 cubic meters. m. December futures for TTF in the Netherlands at 19:23 Moscow time reached €46.2 per 1 MWh, or $502 per 1,000 cubic meters. m, but then declined.

The price of gas in the EU has risen sharply after OMV warned on the evening of November 14 of a possible cessation of gas supplies from Russia due to the deterioration of contractual relations with Gazprom Export. At the same time, the company announced that it had won a lawsuit against a subsidiary of a Russian state-owned company for 230 million euros in an arbitration court.

OMV had already warned in May that if an EU court forced it to suspend payments under the contract with Gazprom Export, this could lead to the suspension of Russian gas supplies under that agreement, with repercussions on the Austrian gas market.

The lawsuit against OMV was filed in January 2023 due to the cessation of Russian gas supplies in the fall of 2022. As the company reported after winning the lawsuit, the recovery decision will be offset against payments it has to make under the supply contract with Gazprom Export. OMV believes that this “will have a positive impact on balancing the related financial losses incurred in 2022.”

According to Bloomberg, for the period from October 2023 to May 2024, Gazprom has supplied more than 80% of Austria's imports under a long-term contract valid until 2040. As reported by Kleine Zeitung, in December 2023, 98% of Austria's gas imports came from Russian supplies, in January 2024 this figure dropped to 97%, and in February to 87%. In the same month, Energy Ministry head Leonore Gewessler said that she intends to explore options for terminating gas supply contracts between OMV and Gazprom.