Ukraine War Pushes Gas Price in Europe to All-Time High

The escalating crisis between Russia and Ukraine that has raised fears of supply shortages has caused European natural gas prices to spike on Wednesday above $2,200 per 1,000 cubic meters for the first time in market history.

The spike in prices is also fueled by the sanctions a number of Western states have placed on Russia amid Moscow’s military operation in Ukraine.

Data from the London ICE exchange shows that the April futures at Europe’s reference Dutch TTF hub soared by almost 60% – $213 per megawatt-hour in household terms – from around $1,500 to $2,226 per 1,000 cubic meters, hitting its new historic maximum.

Only a day before, the settlement price was $1,396.5 per one thousand cubic meters.

Gas prices in the UK jumped to 463.84 pence per therm, close to December’s record 470.83 pence.

Kaushal Ramesh, a senior analyst at Rystad Energy, said that the huge increase in applications is raising the price by the minute.

According to Ramesh, the gas prices are affected by fears that possible damage to infrastructure in Ukraine, through which Europe gets the majority of the Russian gas, and the possibility of supply restrictions on Russian oil and gas can lead to supply outages.

Since Russia is also one of the world’s biggest crude producers, the assault on Ukraine also sent oil prices rocketing Wednesday with European benchmark Brent North Sea oil spiking earlier to $113.02 per barrel – the highest level since 2014 – while the New York-traded WTI peaked to a level last reached in 2013 – $111.50.

OPEC and other major producers, including Russia, have a meeting later Wednesday to discuss whether to temper the price rises – which are helping fan inflation – by ramping up the output, so traders will be keeping a close eye on it.

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