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Russia halts natural gas exports to Latvia, sending European gas prices soaring as other nations brace for a full cut-off

Markets Insider 8/1/2022 (Phil Rosen)
Russian President Vladimir Putin. Getty Images © Getty Images Russian President Vladimir Putin. Getty Images
  • Russia halted natural gas flows to Latvia, the Wall Street Journal reported Monday. 
  • State-run Gazprom said it shut off flows to Latvia over the weekend, citing a violation of conditions.
  • European gas prices surged 6% as nations prepare for more Russian gas cuts.

European gas futures jumped roughly 6% Monday after Russia's Gazprom announced it had shut off natural gas flows to Latvia, per the Wall Street Journal.

The state-run energy major said the gas was shut off to the EU nation because of a "violation of the conditions for gas withdrawal." 

Since Russia invaded Ukraine, Moscow has halted natural gas flows to companies in Poland, Bulgaria, the Netherlands, and Denmark, while severely reducing flows to Germany via the Nord Stream 1 pipeline.

Latvia, historically, has been fully dependent on Russian gas, but had said it would find alternative energy sources by the start of next year.

Russia is the largest energy supplier for Europe, and accounts for roughly 40% of the continent's natural gas.

European officials have accused President Vladimir Putin of wielding energy as a political weapon, and Moscow is widely seen as cutting gas off in retaliation for sanctions. Other EU nations have been trying to reduce demand as they prepare for a potential full cut-off of supplies from Russia. 

In a Monday note, Bank of America analysts said the European natural gas crisis is getting even worse as winter stockpiles could run low.

"The European gas situation is quickly moving from our 'bad' to our 'ugly' scenario in the past month," analysts wrote. 

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