In the latest example of the seemingly absurd state of Europe's energy markets, natural gas prices plunged 30% this week — just as Russia officially cut off supplies Wednesday.
Why it matters: The juxtaposition of cratering prices, just as Europe's biggest supplier of gas turns off the taps, underscores how Europe's market-based energy system has been fundamentally broken amid the fallout from Russia's invasion of Ukraine.
State of play: Last week prices rose an astonishing 40%. As of now, they're still more than 10 times higher than they were at the start of 2021.
- Russia says the latest supply cut-off is for maintenance purposes. Few believe it. The pipeline has been running at just 20% capacity of late.
What's next: European regulators say they're going step in and take action, likely imposing some sort of price controls.
- "The skyrocketing electricity prices are now exposing, for different reasons, the limitations of our current electricity market design. It was developed under completely different circumstances and for completely different purposes. It is no longer fit for purpose," European Commission President Ursula von der Leyen said in a speech this week.
- She said the Commission is "now working on an emergency intervention and a structural reform of the electricity market."