The European gas price reached a new record on Wednesday morning, peaking at €227.5 per megawatt-hour (MWh). This far exceeded Tuesday's peak of €202/MWh.
Though prices cooled later in the day, it remains well above €200. Before Russia's invasion of Ukraine, the European gas price on the markets hovered around €80/MWh.
From today (Wednesday), the Russian majority state-owned multinational energy company Gazprom is only supplying 33 million m³ of gas per day via the Nord Stream 1 pipeline between Russia and Germany – just under half of Tuesday's 67 million, and only 20% of its total capacity.
This halving of supply caused considerable market anxiety as Europe is supposed to start stocking up on winter supplies. Just Tuesday, EU ministers reached an agreement to reduce gas consumption by 15% from August 2022 to August 2023.
- Energy crisis: Gas reduction through Nord Stream 1, uptake in Transgas pipeline
- EU countries commit to reducing gas by 15%, with exemptions
According to energy expert Moniek de Jong, high gas prices will remain high for quite some time. "The price increase is partly due to the great concern about the supply of Russian gas via Nord Stream 1," she said on VRT television programme 'Terzake' on Tuesday evening.
"It is not clear whether Russia will turn off the gas tap completely or open it again. This is causing a lot of uncertainty among gas traders and as a result, the price will increase further," De Jong said.
She suspects that the high gas prices are "here to stay for a long time" and will become the new normal. "In the past, we have had very cheap gas prices, especially the Russian gas. Now we are going to import more of the liquid gas and that is much more expensive."