European gas prices rocketed as much as 30% higher after halt in supplies via Nord Stream

European gas prices rocketed as much as 30% higher on Monday after Russia said one of its main gas supply pipelines to Europe would stay shut indefinitely, stoking renewed fears about shortages and gas rationing in the European Union this winter.

The benchmark gas price surged as high as 272 euros per megawatt hour (MWh) when the market opened after Russia said on Friday that a leak in Nord Stream 1 pipeline equipment meant it would stay shut beyond last week’s three-day maintenance halt.

Nathan Piper, an oil and gas analyst at Investec, said: “We are expecting record gas prices across UK/Europe next week as the impact of long-term restrictions of Russia gas supply is absorbed by the market following the indefinite shutdown of the Nord Stream 1 pipeline.”

He added that the gas price “will remain volatile, and I’d expect a sharp move up tomorrow towards record 700-800p a therm highs.

“However, the key and worrying point is that this is in the middle of summer – prices could move higher as demand increases for heating into winter … A big price jump next week has major implications on the [UK] energy price cap, and the cost for business/industry, who don’t have a price cap at all.”

Compiled by: Basma Qaddour