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EurOil: gas prices skyrocket amid ongoing Ukrainian conflict

The front-month gas price at the Dutch TTF hub spiked at close to $4,000 per 1,000 cubic metres on March 7, amid the escalating conflict in Ukraine that has built on top of an existing energy crunch crisis in Europe.

The April contract at the hub briefly settled at €345 per 1,000 cubic metres at around 08:30 GMT, equivalent to $3,990 per cubic metres. Its average for the day was €227.

Pressure has been rapidly building on European gas prices since Moscow began its military campaign in Ukraine. Prices were already at record levels in recent months as a result of escalating tensions between Russia and the West, as well as a sharp rebound in demand following the easing of coronavirus (COVID-19) restrictions and global supply constraints.

There are mounting concerns that the conflict in Ukraine could lead to a disruption in Russian gas transit via the country, even though, for the time being, supplies are actually higher than they were in February. Meanwhile, temperatures across Europe have dipped lower in recent days, and Asian demand for LNG has soared, limiting how much gas can be sent to European ports.

The crisis has prompted several EU member states to rethink their reliance on Russian energy, including Germany, which has halted the certification process for Russia’s Nord Stream 2 pipeline that is required for the project to ever flow gas. Since then, Berlin has announced it will devote itself to building two LNG import terminals in north Germany that can serve as a replacement.

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