Pricing the Shock: How TTF Futures Reflected Europe's Energy Security Crisis After Russia's Gas Cutoff and the Nordstream Sabotage

Abstract

After Russia invaded Ukraine on February 22, 2022, two figures shocked Europe's natural gas market. These were the €339/MWh intraday price ($97/MMBtu) of the Title Transfer Facility (TTF) gas futures contract on August 26, 2022, and zero flows of Russian natural gas from the existing Nordstream 1 pipeline by early September 2022 (Figure 1). Unknown entities sabotaged the Nordstream 1 and the newly completed Nordstream 2 pipelines on September 26, 2022.¹