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Consequences of rising gas prices can be sad, Foreign Ministry warns

Consequences of rising gas prices can be sad, Foreign Ministry warns

The initiative of the European Union on the price ceiling for gas contradicts the laws of the markets and will lead to their degradation, said Yury Sentyurin, Ambassador-at-Large of the Russian Foreign Ministry.

“There may be different crazy ideas on this matter, these are definitely measures that cannot be classified as market ones. These are counter-market tools. In my opinion, all this leads to such an unpleasant consequence as the degradation of markets. Refusal, violation of international law,” he said. diplomat.

The European Commission in November developed a temporary mechanism for adjusting the gas market to contain strong surges in its cost. It will be launched if two conditions are met simultaneously: the settlement price of the monthly futures on the TTF index exceeds 275 euros per MWh for two weeks (just over 2.8 thousand euros per thousand cubic meters of gas), and the spread between the TTF price and the global LNG price is at least 58 euros for ten trading days in a row. When the mechanism is in place, transactions at a price higher than 275 euros will not be made.

However, this is a very high level: the settlement price of a monthly TTF futures exceeded 275 euros in the entire history of the hub for only a few days in August this year. EU energy ministers had already discussed the EC proposal in November, but disagreed strongly on the level of the limit. There have already been several amendments to the proposal of the European Commission, in particular, as Bloomberg reported, the Czech Republic proposed to reduce the limit to 220 euros, and the spread to LNG to 35 euros, but this proposal did not find consensus either.

Vladimir Putin, commenting on the West’s idea to limit prices for Russian energy resources, said that Moscow would not supply anything abroad if it would be contrary to its own interests.