The exchange price of gas at the ICE Futures site soared by 16% on Wednesday, rising above the $1,300 mark for 1 thousand cubic meters. Yesterday, the price of the May futures at the TTF hub in the Netherlands rose by more than 25%, to $1,375 per 1 thousand cubic meters. Today, the cost of natural gas is declining correctively, but it is still trading at a fairly high level.
The rapid growth of quotes occurred against the background of news that Gazprom significantly suspended gas supplies to Poland and Bulgaria on Wednesday, April 27. Such a measure is a response to the refusal of the authorities of these countries to comply with the new conditions of the Russian energy giant, namely, to pay for gas supplies Russia exclusively in rubles.
Gas supplies to Bulgargaz companies in Bulgaria and PGNiG in Poland were completely stopped. The Polish authorities reported that their gas storage facilities are 80% full, and there should be no restrictions for consumers. However, Polish Deputy Interior Minister Pavel Shefernaker later admitted that several dozen Polish districts were left without gas. According to him, the government is doing everything possible to somehow provide all regions of its country with blue fuel without exception. First of all, the government intends to withdraw all the infrastructure that belonged to Gazprom and transfer it to Polish firms.
Poland has again confirmed its desire to get rid of dependence on Russian natural gas as soon as possible and is going to switch to alternative supplies by the end of this year.
After the suspension of supplies, the Bulgarian Ministry of Energy also assured the public that it does not plan to impose any restrictions on gas consumption for its citizens yet. The government reported that it had already thought through all alternative supply mechanisms with energy companies.
In addition to the fact that Gazprom stopped gas supplies to Poland and Bulgaria, he also warned that in the case of the selection of transit gas for third countries (the one that is supplied through the territories of Poland and Bulgaria), supplies will be reduced by an appropriate amount. In other words, Gazprom will export less gas through the pipeline by this amount, and let the countries figure out for themselves whose fault it was, who honestly paid for their supplies, and who did not.
It is worth noting that Russia exports about 4% of the total volume to Poland. The loss of this share will not make significant weather. France exports about 6%, Hungary - 8%, Italy - 10%. Germany (24%) and the Netherlands (23%) are most dependent on Russian gas. It is clear that stopping the export of an insignificant share to Poland will not form a noticeable gap in Russia's income in the future, especially when there are enough more accommodating countries ready to accept new conditions without problems. For example, the Italian company Eni has already announced its intention to open an account in Russian rubles in Gazprombank, as it hopes to continue quietly importing Russian gas for the needs of the population.
According to Bloomberg, four European countries have already paid for Russian gas in rubles, and ten more companies have managed to open ruble accounts.
As for the overall share of Russia in world exports of raw materials, it has only 6.2% of gas exports. If you look at it from the point of view of the scale of the whole world, then this percentage is extremely small. However, if we look at this situation from the Western European world, it becomes obvious that for Europe, unexpectedly falling supplies of raw materials from the Russian Federation are not just significant, but critical.
It is almost impossible to exclude Gazprom's capacities from European imports quickly. Firstly, terminals for receiving LNG from the United States are not built in one or two years, it will take much longer. Secondly, even if we imagine that these terminals are already ready for use and are waiting for North American raw materials, it is still unlikely to arrive in sufficient volumes.
Admittedly, gas imports from Russia are still the only chance for Europe to fill its gas storage facilities. Gazprom is, without a doubt, the dominant figure in the global gas industry today and, apparently, believes that it has the right to determine a new business policy in the conditions of the "energy war". In this regard, the head of the European Commission, Ursula von der Leyen, accuses Russia of using its advantageous geopolitical position as blackmail and pressure on countries dependent on its raw materials.
However, the press secretary of the President of the Russian Federation Dmitry Peskov said that the new rules for paying for gas in rubles are not blackmail, but a forced measure in response to the extremely unfriendly steps of some countries. Sanctions of Western European states have taken away a significant amount of reserves from Russia, and therefore receiving payment for energy resources in Russian rubles is seen by the government of the Russian Federation as one of the opportunities to overcome unprecedented pressure on the country's economy. Peskov said that Russia will definitely resume the supply of important energy resources to Poland and Bulgaria as soon as it receives payment according to the new requirements.