EU Gas Prices Soar 20% as Russia Threatens to Sanction Naftogaz

An investigation is underway to discover if Nord Stream 1 and 2 pipelines were sabotaged and who did it if true. As this is going on, Russia is threatening to sanction Naftogaz. European gas prices soared nearly 20% on the news.

Reuters reports that Gazprom rejected all claims from Ukraine’s energy firm Naftogaz in arbitration proceedings over Russian gas transit. They had notified the arbitration court. The notice also said that Russia might introduce sanctions against Naftogaz in case it further pursues the arbitration case. That means Gazprom would be prohibited by the sanctions from paying Ukraine the transit fees.

Naftogaz had initiated a new arbitration proceeding against Gazprom earlier this month. They said the Russian company did not pay for the rendered service of gas transportation through Ukraine on time or in full.

Gazprom said on Tuesday that Naftogaz had no “appropriate reasons” to reject its obligations on transit via the Sokhranovka point. It is a key route for Russian gas exports to Europe.

In May, Ukraine suspended the flow of gas through Sokhranovka. It delivers almost a third of the fuel piped from Russia to Europe through Ukraine. They blamed Moscow for the move and said it would move the flows elsewhere.

As soon as that report came out, gas prices jumped nearly 20%. Europe might not have any Russian gas this winter,

“In practice, this will mean a ban on Gazprom from fulfilling obligations to sanctioned bodies under completed transactions, including financial transactions,” the company said.

Gazprom could be left with sending gas only via the TurkStream pipeline to Turkey and a handful of European countries that haven’t severed business ties with Russia.

PowerInbox