Natural Gas Soars In Europe After Russian Measures

Russian sanctions on Poland’s key pipeline are expected to limit Europe’s ability to import Russian natural gas if Ukrainian pipes go down. The Russian measures are also expected to put additional pressure on US natural gas producers as Russia is intended to cut Off Supplies to Europe.

As Europe races to distant itself off Russian energy, US natural gas producers are forced to struggle to meet the vast demand amid soaring prices. Factors including extreme weather and equipment requirements have created a new supply bottleneck amid the war in Ukraine.

On Thursday, prices of natural gas prices in Europe shot higher, one day after Russia announced sanctions on more than 30 energy companies including Poland’s EuRoPol GAZ S.A., the owner of the Polish part of the Yamal-Europe gas pipeline. The decision comes in retaliation to Western measures. The decision also poses a real threat to the supply status.

Moscow sanctioned former subsidiaries of Russian state gas giant Gazprom PJSC in the European Union and the Polish owner of a key stretch of pipeline. The restrictions could decrease Europe’s flexibility to import Russian gas through routes that are not crossing Ukraine, though the full implications on gas supplies were not yet clear.

Europe imports much of its natural gas from energy-rich Russia, and its dependence has come under increased criticism in the wake of Moscow’s invasion of Ukraine.

German Economy Minister Robert Habeck on Thursday accused Russia of using energy as “a weapon.” The same day, Ukrainian Foreign Minister Dmytro Kuleba called on Europe to end its reliance on Russian gas and cut off Moscow’s “energy oxygen.”

The Yamal-Europe pipeline can carry up to 33 billion cubic meters of gas from fields in Russia’s Yamal peninsula and western Siberia through Belarus and Poland to Germany.

Russia can also ship gas directly to Germany through the Nord Stream pipeline that runs under the Baltic Sea. Operators on Thursday reported a drop in gas supplies from Russia via a key Ukrainian pipeline to Europe for a second successive day.

Russia’s Gazprom decided, Thursday, to stop transporting natural gas via the section of its Yamal-Europe pipeline that runs through Poland.


For Gazprom this means a ban on the use of a gas pipeline owned by EuRoPol GAZ to transport Russian gas through Poland according to Gazprom’s spokesman who also accused Poland of “repeatedly violating Gazprom’s rights as a EuRoPol shareholder by sanctioning the Russian energy giant in late April”.

The sanctions, levied over Moscow’s invasion of Ukraine, blocked Gazprom “from exercising its rights attached to shares and receiving dividends,” the spokesman added.