European natural gas prices rise as Russia imposes sanctions on energy companies

Natural gas prices in Europe soared on Thursday, a day after Russia announced a series of sanctions against energy companies operating on the continent that could further jeopardize supplies.

Companies sanctioned by Moscow included former European Union subsidiaries of Russian state-owned gas giant Gazprom PJSC and the Polish owner of a key pipeline section. The restrictions could limit Europe’s flexibility to import Russian gas via routes beyond Ukraine, although the full impact on gas supplies is not yet clear, analysts said.

One target of the Russian sanctions was Gazprom Germania GmbH, a large Gazprom entity that owns the The German government took control last month. German Economics Minister Robert Habeck said on Thursday that some Gazprom Germania subsidiaries are no longer receiving Russian gas due to the sanctions, but the companies have found non-Russian alternatives.

“The situation is escalating to the extent that energy is being used as a weapon,” said Habeck. The Russian move will cut gas supplies to Germany by 10 million cubic meters per day, or about 3% of annual Russian gas supplies to the country, Mr Habeck said. Those volumes could be sourced from alternative suppliers in the gas market, he said.

Nonetheless, Mr. Habeck urged the public to reduce gas consumption in preparation for the event that Russia halted gas exports. “Save, save, save would be extremely helpful for us this year,” he said.

An expanded version of this report can be found at European natural gas prices rise as Russia imposes sanctions on energy companies

Brian Lowry

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