Natural gas prices in Western Europe continued to rise on August 12 to their highest level since December last year, according to data from the London Intercontinental Exchange (ICE).
Gas futures for September delivery on the TTF exchange in the Netherlands increased about 6% to $490 per 1,000 cubic meters, or 42.82 euros per megawatt hour at household prices, before falling slightly. The last time gas futures prices were at this level was in early December 2023.
Gas prices began skyrocketing last week, just as Ukrainian forces launched a cross-border offensive into Russia's Kursk province.
According to Russian media, investors are concerned about the possible impact of the fighting on the transport of Russian gas to the EU through the gas pipeline network through Ukraine.
One of the towns affected by the clashes is Sudzha, located about 9 km from the border. This town is home to the last operating gas measuring station between Ukraine and Russia .
On August 9, spokesman for Russian energy corporation Gazprom, Sergey Kupriyanov, warned that fighting near Sudzha would push natural gas prices higher.
On August 11, Mr. Kupriyanov said that gas transit through Sudzha would continue according to the signed volume.
To date, Ukraine-related sanctions imposed by the EU on Russia have not targeted pipeline gas supplies.
Many European Union member states, including Poland, Bulgaria, Finland, the Netherlands and Denmark, have voluntarily stopped imports. However, Austria, Hungary, Slovakia and Italy are still importing gas through Russian pipelines.
Last week, Slovakia reported a decrease in import volumes, noting that " Russian gas supplies via Ukraine to Slovakia are seriously threatened" by the fighting.
The gas transit agreement between Gazprom and Ukraine will expire at the end of this year and Kiev announced that it has no plans to extend it.
Last month, it was reported that several EU countries were discussing ways to allow gas to continue to flow through Ukraine's transit network after 2024.
