European gas prices soared in early trading on Wednesday following the suspension of gas supplies from Russia to Poland and Bulgaria.

Trade opened at €118 per megawatt hour, up 15% on the previous day and settled to €106 per megawatt hour by mid-morning.

Price volatility is likely over the coming weeks. Gazprom, Russia’s majority state-owned gas company, defended its action due to non-payment in roubles by both countries.

Russia has mandated that gas exports to unfriendly countries, including the EU, be paid for in roubles.

Natural gas is the main ingredient in nitrogen fertiliser. Egyptian granular urea prices are currently trading at $1,000/t (€943.6/t) down from $1122/t (€1020 /t) last month.

However, September future prices of $700/t (€660/t) provides some hope of prices softening.