Some Russian gas flows to Europe halted by Ukraine

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Russian gas, a key energy source for Germany and many other EU economies, has continued to flow uninterrupted in pipelines through Ukraine since President Vladimir Putin ordered the invasion of troops in February.

But in a statement on Tuesday evening, Ukraine’s gas transmission system operator said it had decided to suspend operations at a major transit point due to “interference by occupation forces”. The Sokhranivka measuring station processes up to 32.6 million cubic meters per day, or about a third of Russian gas transiting through Ukraine to Europe, the operator said.

He said Russian interference, including the unauthorized diversion of gas, had “endangered the stability and security” of the system. Ukraine said gas volumes could instead be transferred to the Sudzha transit point further west in territory it controls.

Russian gas company Gazprom said in a statement that such a reconfiguration would be “technically impossible”, adding that it saw no reason for the disruption.

“Transit through Sokhranivka was provided in full, there were no complaints from counterparties and there are none,” he said in the statement posted on his official Telegram channel. “Gazprom fully fulfills all its obligations to European consumers, provides gas for transit in accordance with the contract and operator agreement, transit services are fully paid.”

In a separate statement reported by Reuters, Gazprom said volumes shipped to Europe via Ukraine on Wednesday were down about 25% from Tuesday’s levels.

Oil prices, which had fallen about 9% since Friday, were rocked by the news. Brent crude and U.S. oil were trading up about 3% on Wednesday. US natural gas prices rose 5% on Tuesday and another 1% early Wednesday.

“The threat of a European gas supply disruption appears to be pushing oil higher in Asia today,” wrote Jeffrey Halley, senior market analyst at OANDA. “All bets are off on inflation if Russian gas is cut to Europe.”

Last month, Russia cut off natural gas supplies to Poland and Bulgaria, dramatically stepping up its response to Western sanctions imposed on Moscow over the war in Ukraine.

Gazprom said it had completely halted deliveries to Polish gas company PGNiG and Bulgarian Bulgargaz after refusing to respond to a request from Moscow to pay in rubles, rather than euros or dollars.

The European Commission described this as an attempt at “blackmail”.

— Alex Stambaugh, Nathan Hodge and Julia Horowitz contributed to this article.

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