Early on Monday, natural gas prices in Europe have surged, with April futures at the TTF hub in the Netherlands rising by 36% and surpassing $1,506 per 1,000 m3. The commodity retreated to $1,376 shortly afterwards. Gas futures closed at $1,100 per 1000 m3 on Friday.
The upsurge was triggered by severe sanctions imposed by Western European countries on Russia in response to its invasion of Ukraine. The Russian attack began on February 24 and was announced by Russian president Putin, who labelled it a "special military operation".
The UK, EU, US, and Canada have immediately imposed sanctions against Russia, which were designed in advance. These sanctions have targeted Russian banks, members of the State Duma who voted in favor of recognizing DPR and LPR, and several major businessmen, as well as president Putin and Russia's foreign minister Sergei Lavrov.
Last weekend, Western countries have agreed on disconnecting several Russian banks from SWIFT, as well as banning all transactions with the Bank of Russia.
During the weekend, 42 out of 47 member states of the Council of Europe have voted in favor of suspending Russian membership in the organization. The move was opposed by Russia itself, as well as Armenia. According to Armenian analyst Richard Giragosian, joining the international sanction regime would lead to an absolute isolation of Armenia.
The representative of Azerbaijan did not attend the meeting, signaling Baku was unwilling to show its position on the issue. Serbia, a country historically friendly to Russia, voted against the suspension, while Turkey abstained.
On Friday, the Council of Europe have suspended Russia's participation in PACE and the Council of Ministers.
The EU's gas storage level are at 29.5%, which is 21.5% lower than last year, Gas Infrastructure Europe reported. 47 billion m3 of gas pumped into the storage in summer of 2021 have already been consumed. Germany's underground storage facilities are 70.6% empty, and France's storage facilities are 77.1% empty.
European countries would have to pump an unprecedented amount of natural gas to fill up its gas storage. Limited daily pumping capacity would make this a serious challenge.
Furthermore, Europe would have to rely on stocks stored in 2020 and earlier.
Gas from storage facilities is typically used until late March-mid April, meaning Europe would have to rely on their current reserves for the next month and a half.
