Natural gas prices rallied for a third day, reaching their highest levels since late December amid concerns over possible disruptions to Russian flows through Ukraine.

Reference futures contracts they closed 4.3% higher, at 40.10 euros per megawatt hourfollowing the fighting in Russia’s Kursk region, where the key Russian gas transfer station is located. It is Ukraine’s biggest attack on Russian soil since Putin invaded the neighboring country in 2022.

Sunja station, near the border, is the last gas transporter to Europe via Ukraine. Flows continue for now, with volumes remaining at the same levels as last week, Bloomberg reports.

As Ukrainian Energy Minister Herman Galushenko said earlier, the transit route used for deliveries of Russian natural gas to Europe through Ukraine it still works.

Europe has taken significant steps to wean itself off Russian gas after the 2022 crisis, including the reinforcement of liquefied fuel imports. However, some countries still depend on Russian natural gas, leaving their economies vulnerable to sudden disruptions in flows.

“There is still a great deal that will be lost if the flows are cut off immediately” said James Waddell, Head of European Gas and Global LNG at Energy Aspects Ltd.

“Prima facie we believe that both Russia and Ukraine have incentives to keep gas flowing at normal levels” a Citigroup analyst said in an analysis.

The agreement

The agreement between the two countries expires at the end of this yearso the flows are also expected to stop. In a sign, however, of how important natural gas is to the Old Continent, European officials are holding talks in an attempt to maintain flows even after the end of the agreement.

However, a sharp interruption in natural gas flows will be shock for states like Slovakia and Austria which are still dependent on Russian natural gas

It is noted that the Dutch contracts for natural gas have increased by 45% since the beginning of April.