[ANALYSIS] Gazprom halts natural gas flows from Russia to Europe

• Russian gas via Ukraine stopped after a 2019 transit agreement expired on January 1, 2025, with Ukraine refusing to renew the contract due to ongoing hostilities with Russia.


• Dutch TTF prices gapped higher this morning with the front-month hitting EUR 51/MWh before trimming gains to sub-EUR 50.50/MWh (vs EUR 48.889/MWh prior close on Dec 31st)


• The cessation of gas flows was expected as Ukraine telegraphed continuously that it would not renew the contract.


• Prices are not expected to be significantly impacted for long as Europe has shifted its reliance on Russian gas to sources from Norway, the US, and Qatar. “The stop of flow via Ukraine on Jan. 1 is the expected situation and the EU is prepared for it,” said the European Commission spokesperson.


• Supply via the route only accounts for around 5% of European demand, with most central European customers managing to source alternative supplies, albeit at a premium.


• Desks believe that while there is no immediate risk of shortfall in Europe, the challenge will come when stockpiling ahead of the next heating seasons, with the region’s inventories depleting quickly this season – Bloomberg suggests European storage is now less than 75% full.

02 Jan 2025 - 07:30- EnergyResearch Sheet- Source: Newsquawk