From Russia Without Gas: The MUFG Global Markets Podcast

Russia’s game of pipeline poker continues to keep Europe on edge. European natural gas (TTF) prices are on a tear and are re-testing record highs as Russia further weaponises supply by suppressing flows via the Nord Stream 1 pipeline to a fraction of capacity (20% run rate) in response to sanctions.

In this week’s podcast, Ehsan Khoman, Head of Emerging Markets Research (EMEA), contextualises the state of affairs, with his base case that Nord Stream 1 flows are restored back to a 40% run rate once a repaired turbine that is under maintenance is in place. He believes that could see TTF prices balloon to average EUR180/MWh this quarter. Critically, that could help take EU gas storage levels to its targeted 90% level by end of October through government-driven efficiency measures as well as price-driven industrial demand destruction.

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