European gas futures surge 30% as Russia threatens to cut flows

European gas futures jumped as much as 32% after Russia threatened to cut natural gas supplies to Europe via the existing Nord Stream pipeline.

In a further deterioration relations between Moscow and the European Union, Russia threatened to halt gas flowing along the pipeline to Germany. The warning is part of Russia’s response to international sanctions imposed on the country following its invasion of Ukraine.

No decision has been taken yet, according to Deputy Prime Minister Alexander Novak.

Gas prices surged after climbing as much as 79% on Monday in the most volatile trading conditions markets in Europe have ever seen.

Nord Stream, the biggest route for Russia’s gas supplies to Europe, shipped 59-billion cubic metres of gas last year — around 40% of the nation’s exports to the continent.

Europe’s reliance on Russian energy has been a key factor in efforts by the continent’s leaders to agree on how to respond to the invasion of Ukraine.

Last month, Berlin shelved the $11bn Nord Stream 2 pipeline project, and European Union officials say they’re working on a plan that could cut the bloc’s import needs from Russia by almost 80% this year. 

Novak, who is also in charge of energy affairs, said Russia has information about possible action being planned against the Ukrainian gas transport system, according to Interfax news agency. 

Russia has information about a possible “provocation” being planned against the Ukrainian gas transport system, Novak said late Monday, according to Interfax news agency.

“I want to warn about this in advance,” he was cited as saying. “We are doing everything in our power to prevent this.”

European benchmark gas futures traded 18% higher at 270 euros a megawatt-hour by 8.04am in Amsterdam. 

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