Oil and natural gas soar after Russian attack on Ukraine

The impact of Russia’s attack on Ukraine has been felt particularly strongly in the price of futures markets of natural gas TTF, the benchmark for Europe, whose price for delivery in March on the Dutch market It has shot up this Thursday more than 60% and has exceeded 141 euros per megawatt hour (MWh).

The price of futures contracts brent barrela reference for Europe, has also shot up 6.5% this Thursday, and has reached 103.7 dollars, 7.11% above the price observed on Wednesday and its highest level recorded since August 2014. For its part, the West Texas Intermediate (WTI) barrel price rose 7.5% at the opening of the session above $99, up $6.95 from the previous close. Like its European counterpart, the price of this barrel has reached its highest level since August 2014.

At the end of 2021, natural gas reached its all-time high (180 euros per MWh) at a time when the tension in Ukraine was already evident and several countries pointed to Gazprom for reducing gas flows through the gas pipeline that crosses the country to Europe, something that Moscow always denied and argued that it was a commercial strategy. In addition to the impact on industry and households that use it for heating and other services, the increase in natural gas prices is the cause of the rise in electricity in wholesale markets throughout Europe.

Analysis of the economic impact of Russia’s attack on Ukraine

Garamendi: “We have guaranteed supplies, but not prices”

The president of the Spanish Confederation of Business Organizations (CEOE), Antonio Garamendiexpressed his concern on Thursday at RNE’s microphones over Russia’s attack on Ukraine, and assured that “we have assured supplies, but not prices.”

“It will refer to everything that is the approach to energy, gas. In Spain, there will be no problems with supply issues, we have the tube with Algeria, although we have closed the other with Morocco, we have the regasification plants, we are the ones with the most in Europe and everything that comes by ship, liquefied gas, in principle, the supply is guaranteed. But that does not mean that the rise in prices does not really happen “, he has expressed.

Ribera warns of price increases

Along the same lines, the Third Vice President and Minister of Ecological Transition, Teresa Ribera, has remarked that “in Spain the guarantee of security of supply is guaranteed” although “it can be affected by energy prices, on all fronts” due to the war in Ukraine.

In statements to the media, he insisted that despite the fact that the supply is guaranteed, “we are not alien to the mechanisms for setting prices in the international markets for energy raw materials and this affects our energy prices and, as a consequence, of it, in the economy as a whole”. In fact, Ribera has considered that this issue will be addressed at European level and it is not ruled out that “additional measures for the protection of energy consumers”.

In any case, Ribera has remarked that Russia It is not one of the “main suppliers neither by tube, nor by ship” in Spain, although the situation makes it necessary to strengthen “coordination at European level”. That is to say, if Spain has a third of the regasification capacity of Europe as a whole, the rest of the countries that may be affected to a greater extent by this incidence of the origin of the Russian gas makes it essential to reinforce coordination on “where freighters from third countries must unload,” he explained.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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