The Kremlin’s move to take control of the unsettled Crimea region threatens around a tenth of Europe’s gas supplies, which come from Russia through Ukrainian pipelines.
On the ICE, gas prices for next-month delivery jumped to 61.5 pence a therm, reversing a downward trend from winter highs of 69 pence.
The spike was not as sharp as it might have been, as gas stores across the Continent are high following a relatively mild winter.
However, the territorial dispute, coupled with the Ukraine’s unpaid debts of €1.55 billion to Russian energy giant Gazprom, raises the risk flows could be cut off.
Analysts say around half the affected volume could be rerouted through Gazprom’s Nord Stream pipeline into Germany if necessary.
David Cox, managing director of the Gas Forum, said that while physically the gas could be replaced from other sources, prices would “probably go up significantly” in that event.
Alternatively, the Ukraine could put pressure on Europe to pay its gas bill in order to keep the pipeline open. “It is a bit of a no-win for the Europeans,” said Cox.