Both gas and carbon markets posted strong gains this morning after Austrian energy giant OMV announced that it had successfully received an arbitral award of over €230 million following proceedings against Gazprom from the International Chamber of Commerce (ICC).

The TTF front month, Europe’s benchmark price, jumped immediately more than €2 above yesterday’s settlement, reaching briefly  €46.00/MWh,  for the first time since early December last year. A less pronounced price movement was seen on the carbon market, with EUAs trading at €67,60, below this week’s high of €68,80 reached in Monday’s session. 

The ruling could deteriorate the contractual relationship between the two giants and jeopardize Russian gas deliveries, a scenario that was taken into account by the OMV, which is considering alternative sources. 

“As part of OMV’s ongoing diversification strategy, it has continuously and successfully built up its gas supplies from non-Russian sources and additional pipeline capacities,” the Austrian group announced on his website. It also confirmed that “it can deliver the full contracted volumes of gas to its customers in case of a potential disruption.”

On the other hand, Reuters reported yesterday that Slovakia has signed a short term pilot contract to buy gas from Azerbaijan, paving the way for a possible longer term deal. The news was described as  “a small sigh of relief” by  energy consultancy Auxilione. 

Rising concerns surrounding Russian gas deliveries come at a time when colder temperatures are expected. Traditionally, at this time of year, carbon market participants are increasingly focusing on the gas market for direction. In this context, we expect any disruption in gas deliveries to continue to generate a nervous reaction for the EUAs as well.