For the first time in a year…the price of gas in Europe rose to 50 euros

Natural gas prices in Europe rose during trading on Tuesday to 50 euros per megawatt-hour for the first time in more than a year, with Russia preparing to supply natural gas to Europe via a network as of Wednesday morning, given the non-renewal of the agreement to transit Russian gas into Ukrainian territory, which has expired. Tuesday.
Bloomberg News Agency quoted a statement from the Ukrainian gas pipeline operating company as saying that initial orders for transporting gas through the Sodzha pumping station on the Russian-Ukrainian border as of January 1 were zero.
This data, which is still subject to update, represents customer gas demands, not physical supplies of fuel.
At the same time, it is the first concrete sign that Russian flows to the EU via Ukraine – the main transit route for gas for decades – will stop at 6am CET on New Year’s Day.

Depriving Russia of export revenues

The 5-year transit agreement between Moscow and Kiev expires as soon as the deadline expires in 2024, with no alternative despite months of political wrangling.
Ukrainian President Volodymyr Zelenskyy rejected any agreement that would guarantee the continued flow of Russian gas to European markets to deprive Russia of the revenues from these exports.

Doubts about the continued flow of these supplies, which represent about 5% of the total European demand for gas, led to a rise in standard contract prices by 51% during the current year.

Extremely cold weather wave

The expected cessation of supplies that benefit Slovakia and a number of Central European countries comes at a time when the region is preparing for a wave of extremely cold weather during January.
Natural gas stocks in the region are also declining faster than usual, making it difficult to reach target storage levels before the peak demand for gas for heating purposes during the winter.
On the other hand, the European Commission confirmed that the European Union is ready for the end of the transit of Russian gas through Ukraine, in response to continued criticism from Slovak Prime Minister Robert Fico.
A Commission spokeswoman said on Monday evening that Europe’s gas infrastructure is flexible enough to supply gas to Central and Eastern Europe from non-Russian sources via alternative routes.
She added: “The impact of stopping transit through Ukraine on the security of supplies in the European Union is limited.”

Kyiv refuses to extend the agreement

Ukraine, which has been resisting a large-scale Russian invasion for nearly 3 years, will stop the transit of Russian gas through its territory at the beginning of the new year.
It is noteworthy that the current transit contract is about to expire, and Kiev had long ago announced that it would not extend it.
By 5:7 p.m. on Tuesday, Amsterdam time, the price of futures contracts in the Netherlands rose by 4.5% to 50.04 euros per megawatt-hour for delivery next February.