European gas prices on the rise again as Ukraine war hots up

European gas prices on the rise again as Ukraine war hots upThreats to Russian pipeline gas supply via Ukraine are pushing up prices in Europe again.But weaker demand, increased renewables, EU LNG import capacity, and rising LNG imports, including from Russia, could help offset the upside risk.Recent advances by Ukraine into Russia's Kursk region have resulted in the capture of the Sudzha gas transit station, a key gas-transit point on route to eastern Europe. 1 This not only threatens immediate supplies, with the risk of an accidental interruption now much higher, but also complicates negotiations on a revised gas transit agreement between the two countries once the current deal ends later this year.Despite the fighting, Ukraine has continued to transit Russian gas for a fee, although prospects once the deal expires were already uncertain.The pipeline that transits Ukraine from Sudzha can carry up to 40 bn m 3 /yr of gas, although flows reduced to just 15 bn m 3 in 2023, with Hungary, Austria, and Slovakia still heavily reliant.Austria's dependency on Russian gas rose to more than 90% earlier this year, although more expensive alternatives are reportedly in place for much of this winter should they be required, and the country is actively seeking alternatives and a way out of its long-term supply contracts with Gazprom. 2