Shipments from Russia via Ukraine are expected to drop about 30% on Thursday after disruptions at a cross-border entry point due to the war in Ukraine.

European natural gas prices surged following disruptions to a key transit route through Ukraine, and as Germany said, Russia was weaponizing the energy in a growing clash over the ‘supply.

The benchmark contract jumped more than 22%, with shipments from Russia via Ukraine expected to fall around 30% on Thursday following disruptions at a cross-border entry point due to war. This adds to market concerns as Moscow halted shipments to Gazprom Germania GmbH and its units in retaliation.

On Wednesday evening, Moscow sanctioned former Gazprom subsidiary PJSC – which is now under the control of Germany’s energy regulator – including energy supplier Wingas GmbH and London-based unit Gazprom Marketing & Trading Ltd. This decision could also upset LNG markets and bring even more supply concerns.

Still, German Economy Minister Robert Habeck played down the impact, saying the Russian cuts amounted to just 3% of the country’s imports. The nation was receiving shipments from alternative sources and can cope with the disruption, he said. Utility RWE AG said Russia’s new sanctions are “not significant”.

The new risks come just as a solution appears to be emerging for what has been the main headache for weeks – Moscow’s demand for ruble payments for its gas. Firms were growing confident they could continue to buy Russian supplies without breaching sanctions, with Italian Prime Minister Mario Draghi appearing to back such a move on Wednesday. More and more European buyers are opening ruble accounts.

“These developments are just the latest in a series of steady deterioration in security of supply during the war,” Eurasia Group said in a note. “The ongoing disruptions will therefore mean that EU states will step up their preparations for greater disruptions to gas supplies to Russia this year.”

Dutch first-month gas, the European benchmark, was up 20% at 113.01 euros per megawatt hour at 1:54 p.m. in Amsterdam. The UK equivalent increased by 37%. German power also surged, with next month’s contract increasing by as much as 17%.

Concerns about Russian supplies have weighed on the market for months. Flows through Ukraine could hit their lowest level since late April, according to network data. This is expected to affect a key gas transit route through Slovakia and Austria. Authorities in Vienna said there are currently no delivery limitations.

Supplies through the Nord Stream link to Germany, the largest gas pipeline route from Russia to Europe, remain stable. But, separately, flows from Norway are expected to decline on Thursday.

Ukraine’s gas network on Wednesday stopped accepting Russian fuel at one of the two main entry points, saying it could no longer control the relevant infrastructure in occupied eastern Ukraine. Gazprom said it was unable to redirect all supplies to another entry point due to the current operation of its system.

No Russian gas flows into the Sokhranivka station on the Ukrainian border for a second day. Sokhranivka had handled about a third of Russian gas flows crossing Ukraine before the shutdown, with the rest passing through Sudzha, the other entry point.

“Sokhranivka’s loss of supply is not dramatic, but it sends a signal about what could happen,” SEB analysts said in a note. “It doesn’t scream crisis, but it is a wake-up call for what’s to come. We could probably see more supply disruptions in the future.

Market news, analysis

• RWE says next gas payment to Russia due end of May
• Commerzbank should review its provisions in the event of a gas shutdown: CFO
• LNG WRAP: Asian buyers seek more forward supply as spot rates rise
• LNG spot prices in Asia could rise with low inventories: BNEF

–With help from Todd Gillespie.