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Potential disruptions in Russian gas supplies have driven European gas prices to their highest level in a year, according to Spiegel.
Following warnings from Austrian energy group OMV about trade interruptions, European gas prices surged by 5% on Thursday, reaching €46 per megawatt-hour—the highest since November last year. While this remains significantly lower than the peak of €346 in August 2022, concerns over supply stability persist.
OMV announced that Russian state company Gazprom might halt supplies due to a court ruling. An arbitration court awarded OMV €230 million in compensation for Gazprom’s failure to deliver gas to Germany in September 2022. OMV intends to deduct this amount from its upcoming payments, sparking fears that Gazprom might terminate deliveries entirely.
Industry analysts warn that the situation could escalate next week when OMV’s €213 million payment is due. If this payment isn’t made, Gazprom could cancel its contract, which accounts for almost half the gas currently transported through Ukraine. Approximately 38 million cubic meters of Russian gas flow to the EU via Ukraine daily.
OMV’s storage facilities are over 90% full, and Austria’s energy minister Leonore Gewessler stated that the country has been preparing for possible supply interruptions. Market analysts also report that Europe is well-stocked, with LNG imports in October increasing by 17% compared to September, and German gas storage at 97% capacity.
Meanwhile, Austria has established a commission to review the long-term gas supply agreement with Gazprom, extended in 2018 until 2040, to explore potential early termination options.
