Gas prices surged by more than a tenth to their highest levels in two months yesterday on renewed fears that Russia will restrict supplies to Europe.
The rise in UK gas prices came after concerns that Moscow may withhold gas if it is blocked from starting up its Nord Stream 2 pipeline. UK benchmark month-ahead gas prices closed at 294.5p a therm, after touching 301.65p. That is six times higher than a year ago when gas was less than 50p a therm.
In Britain, the high wholesale prices have led to the fall of more than two dozen energy suppliers and are expected to feed through to record increases in bills.
Experts have accused Moscow of restricting supplies to Europe as leverage to ensure the start-up of Nord Stream 2, which would allow Russia to bypass Ukraine when supplying Europe.
Yesterday’s rally came after the German foreign minister said that Russia would not be allowed to start operating the pipeline without changes to comply with European law and that Russia amassing troops on the Ukrainian border was also a factor in the decision.
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Tom Marzec-Manser, head of gas analytics at Icis, the price reporting agency, said: “European natural gas prices have been spooked noticeably higher by comments concerning Russia’s Nord Stream 2 pipe from new German foreign minister Annalena Baerbock, even though what was said was nothing new.”
