(Bloomberg) — European natural gas prices surged after rallying 43% last week as Russia’s steep supply cuts put governments on high alert amid a mounting possibility of rationing.

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Benchmark futures rose as much as 8.1%, with shipments via the Nord Stream remaining at just 40% of capacity. Supply is likely to remain curbed with Gazprom PJSC’s chief Alexey Miller warning there’s no solution for now for issues with the gas turbines essential for the functioning of the pipeline. That’s forcing major European consumers to withdraw gas from the reserves they have been building for the winter when demand typically peaks.

Moscow has curbed shipments to top buyers in Germany, Italy and France, prompting the European Commission to say Russia is using its energy for “blackmail.” Leaders of Italy and Germany — who traveled to Kyiv last week just as Gazprom was tightening its grip on European supply — have also accused President Vladimir Putin’s regime of deliberately cutting out shipments.

The continent has been boosting imports of liquefied natural gas to fill at shortfall. But it’s having to compete with Asian buyers for cargoes at a time when the global market is stretched. A prolonged outage at the Freeport LNG plant in the US is limiting supplies this year.

Gas Rationing Gets Closer for Europe as Putin Squeezes Supplies

“This renewed market stress comes as a warning of how difficult an orderly near-term transition from Russian gas will be,” Timera Energy said in a note. “Europe will need to battle with Asia and Latin America for any incremental LNG supply to facilitate reduction of Russian pipeline imports. That means higher prices as we saw last week.”

Story continues

Dutch front-month gas futures, the European benchmark, were up 5.3% at 124 euros per megawatt-hour as of 8:32 a.m. in Amsterdam.

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