European gas buyers are braced for further pain after Russia said one of the main pipelines to Europe will remain closed indefinitely, prompting fears of energy rationing.
Analysts warned that prices, which have risen by nearly 400% over the past year owing to lower gas flows from Russia, would go up further when markets open on Monday after Moscow scrapped a Saturday deadline for flows to resume, saying it had discovered a fault during maintenance.
European leaders have accused Russia of weaponising energy supplies around the invasion of Ukraine, while Moscow blames western sanctions and technical issues for supply disruption.
The Nord Stream 1 pipeline, which runs under the Baltic Sea to Germany, had supplied about a third of the gas exported from Russia to Europe, but was running at 20% capacity before flows were halted for maintenance last week.
Th Russian state-owned energy company Gazprom had been expected to restart flows at 20% after the most recent stoppage, leading the benchmark Dutch TTF gas prices to fall back by about 40% from the record high on 26 August, closing at just over €200 (£173) per megawatt hour on Friday.
Leon Izbicki, an analyst at Energy Aspects, said: “On Friday … the market was already pricing in Nord Stream 1 flows coming back. We expect a significantly stronger open for the TTF on Monday.”
Record power costs linked to surging gas prices have already forced some energy-intensive industries, including fertiliser and aluminium makers, to scale back production and led EU governments to pump billions into programmes to help households.
The effect of the latest cut would depend on Europe’s ability to bring in gas from other sources, said Jacob Mandel, a senior associate for commodities at Aurora Energy Research.
“Supply is hard to come by, and it becomes harder and harder to replace every bit of gas that doesn’t come from Russia,” he said.
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