Natural Gas Prices Soar In Europe And Asia As Moscow Plots Closure Of Key Pipeline

Natural gas prices in Europe and Asia have skyrocketed after Russia's state-controlled Gazprom announced plans to temporarily close a key pipeline at the end of August for maintenance, worsening Moscow's energy standoff with Europe.

The European benchmark Dutch front-month futures rose for the fifth consecutive week and closed at a record-high on Friday.

The German year-ahead power reached a record 630 euros per megawatt-hour, which was a double digit jump.

The price of natural gas in Asia spiked on Friday after the firm announced it was shutting down, with producers offering spot cargoes for winter nearly 10% above the benchmark before the announcement.

The Japan-Korea Marker hit its highest level since early March last Tuesday as firms around the world rushed to secure supplies for winter.

There will be a three day shut down of the Nord Stream 1 line. The major supplier of European gas underwent a 10-day shut down for maintenance in July and has been operating at reduced capacity ever since. European leaders have accused the Kremlin of using its energy to punish and blackmail the bloc over sanctions for invadingUkraine and the shutdowns have compounded the already volatile energy market. Moscow blames sanctions for its inability to have a turbine returned from Canada, where it is being serviced. Both European and Canadian leaders disagree with this account.

European officials fear that Russia would cut off supplies in response to the sanctions. The bloc's dependence on Russian energy exports, particularly gas, has made it difficult to sanction Moscow and present a unified front against the war. Scant supplies from Russia, magnified by extreme weather across Europe, have pushed energy prices to their highest levels in decades. As nations prepare for the possibility of a tough winter with no Russian gas, they have begun to store wood and other materials. Fuel costs in Asia have gone up due to the situation in Europe, as key natural gas importers like Japan and South Korea scramble to secure supplies earlier than usual, fearing they will be squeezed out by increasing European demand later in the year.

CNN explains why UK energy prices are higher than in Europe.

Europe's gas supply is at risk due to the 12-metre turbine.

Fears of Moscow keeping gas taps closed led to the restart of the key gas line.