European gas prices at year-high following kyiv’s incursion into Russia

European gas traded at its highest level of the year on Thursday, August 8, driven by geopolitical risk and fears about Europe’s gas supply after Ukraine’s incursion into Russia. Around 5:10 p.m. in Paris, the Dutch TTF futures contract, considered the European benchmark for natural gas, climbed 4% to 40.005 euros per megawatt hour, pushing it to 40.475 euros, its highest price since December. Since Tuesday, European gas has jumped around 9%.

The Ukrainian military launched a surprise cross-border offensive into the Russian region on Tuesday, using up to 1,000 troops and armored vehicles, according to the Russian General Staff. Russian forces are still facing a major incursion by Ukrainian troops into their territory in the border region of Kursk. “European gas prices jumped (…) after news that Ukrainian troops had seized a gas transit point in Sudja, part of the last remaining pipeline that carries Russian gas to Europe via Ukraine”DNB analysts explained to AFP.

The transit of Russian gas via Ukraine fell in June to its lowest level in history, at 334 million cubic meters per day, the operator of Ukrainian gas pipelines OGTSOU announced on Friday, denouncing the “gas blackmail” from Moscow.