The price of European natural gas rose significantly on Tuesday and passed the 200 euro mark. In the late afternoon, the TTF futures contract for Dutch natural gas rose to around 207 euros per megawatt hour. That was about 19 percent more than the day before.
In early trading, the price was still 179.5 euros. The TTF contract serves as a benchmark for the price level on the European natural gas market.
The Russian state gas company Gazprom has threatened sanctions against the Ukrainian state gas company Naftogaz. Naftogaz currently receives transit fees for transporting natural gas to other European countries. In the event of sanctions, transit fees would no longer be paid and deliveries would stop.
Pipeline leaks fuel the situation
According to Naftogaz, Gazprom has already reduced throughput and cash payments since May. Naftogaz has therefore sued Gazprom for damages. Despite the ongoing Russian war of aggression, Ukraine has been transporting Russian natural gas westwards. Gazprom accuses Ukraine of not fulfilling its transit obligation. However, Germany only receives very small amounts of natural gas via Ukraine.
Already in the morning, several leaks were discovered in the two gas pipelines Nord Stream 1 and 2. As Danish authorities announced on Tuesday, a total of three leaks were discovered in the two gas pipelines that run from Russia to Germany. The cause is so far unclear. The operating company Nord Stream described the damage as "unprecedented" and was unable to specify when operation could be possible again.
A few weeks ago, Russia stopped deliveries via Nord Stream 1 for allegedly technical reasons. Critics accuse Russia of deliberately stopping supplies and using natural gas as a political weapon. Nord Stream 2 did not go into operation because of the Ukraine war.