The price of natural gas in Europe is currently at an eight-month high due to worries about a possible disruption in the flow of Russian gas through Ukraine.
The benchmark European contract, Dutch Title Transfer Facility gas futures, was trading 0.01 percent higher at €40.10 ($43.80) per megawatt hour on Friday.
Thursday’s futures closing saw a 4.3% increase following conflicts in the Kursk region of Russia, home to a vital gas intake point. Since the conflict two years ago, the incursion was Ukraine’s most significant attack on Russian territory.
According to Rystad Energy analyst Christoph Halser, “the market has largely priced in this risk and supply fundamentals remain otherwise bearish” despite geopolitical tensions and the confirmed seizure of the Sudzha gas metering station.
“The European gas markets are closely monitoring the potential for disruptions, and Russia’s efforts to construct a shadow fleet to evade sanctioned energy infrastructure add complexity to the situation.” A gas transit agreement between Russia and Ukraine is scheduled to expire at the end of the year.
In the interim, the EU has explored boosting its gas imports from Azerbaijan and supplying the fuel to Europe through the pipeline network already in place in Ukraine. Although Ukraine’s total transit volumes in 2023 accounted for 4.3% of all gas imports into Europe, countries like Slovakia and Austria rely largely on Russian gas passing through Ukraine, according to Rystad.
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