Gas prices soar amid energy shortage fears
European gas prices soared on February 28, after the US, the EU and its allies agreed over the weekend to impose sweeping sanctions against Russia's financial sector, including preventing the access of some Russian banks to the SWIFT financial messaging system.
European governments and analysts have signalled that the sanctions could indirectly hinder Russian oil and gas exports, due to disruptions in financial transactions and Moscow potentially withholding supplies in retaliation. Meanwhile the conflict in Ukraine, now in its fifth day, is intensifying, with satellite images indicating that a large convoy of Russian ground forces is headed to Kyiv to try and win control of the Ukrainian capital.
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Meanwhile, Ukrainian and Russian delegations are due to hold peace talks later today at the Ukraine-Belarus border. But Ukrainian president Volodymyr Zelenskiy has said he does not expect a positive outcome from diplomacy at this stage.
Russian gas transit via Ukraine has actually risen since the Russian invasion began, with analysts at BCS Global Markets attributing this to prices under Gazprom's contracts becoming more competitive versus spot prices at European hubs.
The April delivery contract at the Dutch TTF gas hub was trading 23.8% higher as of 08:45 GMT on February 28, at €115.3 ($129)/MWh. Data published by Gas Infrastructure Europe shows that gas storage utilisation fell 0.22 percentage points on February 28 to 29.5% capacity.