US natural gas prices rose 9% on Tuesday as Russia’s war against Ukraine continues to disrupt various commodity supply chains.
Prices surged above $8.00 per million British thermal units and hit a high of $8.17, representing the highest level since September 2008. Henry Hub prices stood 6.4% higher at $7.954.
The price increase comes as US-based energy companies receive higher demand for their product overseas. About 30% of planned US liquefied natural gas export capacity has been secured since Russia’s attack against Ukraine, according to a Bloomberg report. This has helped renew financing for the beleaguered sector that saw a dramatic, years-long downturn amid the bust of the 2015 shale boom.
Energy Transfer disclosed an 18-year supply deal with South Korea’s SK Gas Trading on Tuesday, just one day after it announced a 20-year contract with Gunvor Group. Furthermore, the French utility company Engie SA secured 2 million tons of liquefied natural gas from NextDecade’s proposed gas plant.
The rising demand for US energy followed an abstention from Russian gas. Still, Russia remains one of the world’s largest producers of oil and Germany believes that the Russian oil ban could put Europe in crisis.
We will be harming ourselves, that much is clear,” Robert Habeck Chancellor of Germany said, according to the Financial Times. Habeck said Europeans should be prepared to bear the cost in order to help Ukraine, “but there’s no way this won’t come at a cost to us.