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Russian demand for rouble gas payments causes first shutdowns in Poland and Bulgaria: The MUFG Global Markets Podcast
Russia is making good on a threat to cut off gas flows to “unfriendly countries” that refuse to pay for the fuel in roubles. On 26 April, Russia’s Gazprom informed Poland and Bulgaria’s state gas companies, PGNiG and Bulgargaz, that it would halt gas supplies commencing Wednesday (27 April) following their refusal to comply with its demands.
Ehsan Khoman, Head of Emerging Markets Research (EMEA), believes that whilst this development is not an immediate systemic threat, it is a major turning point for European gas markets, with a key concern now whether Russia will escalate further by cutting supplies to other European countries.
What is clear is that this major escalation will keep European gas prices supported, with spillovers into the Asian market given Europe will have to increasingly compete with Asia for flexible LNG supply, keeping Asian spot LNG prices bid.
Disclaimer: www.mufgresearch.com (PDF)
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