Market Overview

1 March 2022

War has not Affected Russian Gas Supplies via Ukraine

The movement of Russian gas through the Gas Transmission System (GTS) of Ukraine has not been disrupted despite war actions across almost the entire Ukrainian territory, according to the Gas Transmission System Operator of Ukraine. Gas supplies are continuing to be carried out as normal in line with the existing reserved amount held by European clients. Russia’s energy corporation Gazprom pumped 107 million cubic m of gas via Ukrainian GTS on February 27. This amount has been confirmed by both the Ukrainian side and Gazprom. The existing long-term gas transportation contract states an annual gas transportation above 40 billion cubic m (daily average 109 million cubic m) and is set to expire in 2024. So, on the back of these details, the regular transportation routine has not been shattered. Both sides do not consider the situation as force majeure. This position is held by all sides, including Gazprom, Ukraine, and consumers in Europe. Gazprom continues to carry out its gas supply in full.

Gas transportation plunged by half in January but recovered in February. However, sanctions against Russia imposed over its aggressive invasion in Ukraine are critical to Gazprom counterparts and to the market overall. Gas spot prices surged 36% to 110 Euros per megawatt-hour on Monday, while it was over 180 Euros per megawatt-hour last December. Prices jumped on fears of transportation breaks. However, most of the assets associated with Russia and Ukraine experienced high volatility on Monday. Gas spot prices scaled back by the end of the day to 103.50 Euros per megawatt-hour.

 

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Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade.

Mark Goichmann
Market Focus

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

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