S&P/ASX 200 Index (ASX: XJO) energy shares are outperforming on Wednesday amid news major pipelines supplying gas to Europe have suffered unexplained leaks.
Some European leaders are said to have accused Russia of orchestrating two explosions on the Nord Stream pipelines amid continuing concerns of an energy shortage on the continent.
European gas prices jumped as much as 20% on Tuesday (Wednesday AEST) amid news of the leak, The Wall Street Journal reports.
Back home, the S&P/ASX 200 Energy Index (ASX: XEJ) is leaping 1.01% at the time of writing. Meanwhile, the ASX 200 has slipped 0.76%.
Here's how some of the market's favourite energy stocks are performing right now:
- The Woodside Energy Group Ltd (ASX: WDS) share price is up 1.43% at $31.11
- That of Santos Ltd (ASX: STO) has slipped in the red, trading 0.58% lower at $6.91
- Finally, stock in Beach Energy Ltd (ASX: BPT) has lifted 1.37% to $1.48
Let's take a closer look at what might be going on with ASX 200 energy shares on Wednesday.
Is this boosting ASX 200 energy shares?
ASX 200 energy shares are outperforming on Wednesday. Their strong performance comes amid reports Nord Stream 1 and 2 may have been damaged in an act of sabotage.
Polish Prime Minister Mateusz Morawiecki was one official seemingly pointing the finger at Russia. Morawiecki was quoted by ABC News as saying "we see clearly that it's an act of sabotage, related to the next step of escalation of the situation in Ukraine".
An unnamed Ukrainian official was said to have labelled the leaks a sabotage. Meanwhile, neither Danish prime minister Mette Frederiksen or Kremlin spokesperson Dmitry Peskov reportedly ruled out sabotage as a possibility.
Nord Stream AG, a consortium of five companies operating 1,224-kilometre gas pipelines through the Baltic Sea, said in a release:
Currently, it is not possible to estimate a timeframe for restoring the gas transport infrastructure. The causes of the incident will be clarified as a result of the investigation.
Whatever the cause of the leaks, they will likely see demand for gas soar in Europe. That's likely to bolster prices, in turn.
Of course, higher energy commodity prices are generally good news for ASX 200 energy shares.
The sector is also likely benefiting from rising oil prices today. The Brent crude oil price lifted 2.6% overnight to US$86.27 a barrel. Meanwhile, the US Nymex crude oil price gained 2.3% to US$78.50 a barrel.
The commodity's price rose amid rumours the OPEC+ could cut output targets next month, as my Fool colleague Aaron reports.
