Europe’s natural gas futures jumped after a leak was discovered on a pipeline in the Baltic region, sparking concerns that the event could be similar to blasts on the undersea Nord Stream gas pipeline just over a year ago.
The benchmark contracted surged as much as 8.3% to trade above €40 a megawatt-hour on Monday. A suspected leak was detected overnight on Sunday in an undersea pipeline connecting the Finnish and Estonian grids, which its operators closed while investigating the issue.
Read More: Finland Flags Suspected Leak in Baltic Undersea Gas Pipeline
While the current incident appears contained for now, it comes just as the northern hemisphere is approaching its heating season, making it more vulnerable to disruptions in supply. Energy systems have been on high alert after explosions on Russia’s Nord Stream pipelines to Germany last year, which were also in the Baltic Sea.
Furthermore, gas tracked advances in crude oil prices, which surged after a deadly attack on Israel over the weekend. The incursion threatens to inflame tensions in the Middle East.
Uncertainty over liquefied natural gas supplies, a lifeline for Europe after Russian pipeline gas flows declined last year, also remains. Labor unions in Australia are expected on Monday to file a fresh seven-day notice to resume strikes at Chevron Corp.’s two LNG plants.
Front-month gas in the Netherlands, Europe’s benchmark, gained 4.6% to €40.00 a megawatt-hour by 8:32 a.m. in Amsterdam.
