Europe's gas and oil prices surge amid disruption in supply chain

The impact of the Russia-Ukraine crisis is heightening concern about global supply chains as Europe's benchmark gas and oil prices continued to rise.

Key gas listings on the United Kingdom's trading markets jumped as much as 27 percent and later settled up 5 percent on Monday, reflecting increases across Europe.

The crisis has caused oil prices to soar above $100 a barrel for the first time in nearly a decade, the Reuters news agency said. This is six times higher than a year ago.

The Times newspaper reported that Russian gas supplies to Europe may be interrupted as a consequence of sanctions against President Vladimir Putin's regime.

Russia historically provides around 40 percent of the European Union's natural gas supply and approximately 50 percent of Germany's, noted the Oilprice.com news site.

An analyst at Goldman Sachs, quoted by The Times, said markets must reflect "the risk that Russian commodities eventually fall under Western restrictions".

A 65-kilometer long Russian military convoy was heading toward the Ukraine capital Kyiv on Tuesday after ceasefire talks between Russia and Ukraine failed to reach a breakthrough, said Reuters.

An oil market analyst, quoted by Reuters, said prices could continue to rise.

"The fragile situation in Ukraine and financial and energy sanctions against Russia will keep the energy crisis stoked and oil well above $100 per barrel in the near-term and even higher if the conflict escalates further," said Louise Dickson, from Rystad Energy.

Fossil fuel prices will inevitably impact costs for consumers and businesses, said The Times, which noted that UK households were already bracing for a 54 percent jump in energy bills, to almost 2,000 pounds ($2,680) a year from April.

The paper noted that the UK has no direct pipeline links to Russia, but partly depends on Russian supplies into Europe. It said any disruption to the European supply would increase the continent's demand for liquefied natural gas shipments.

In a social media post, Kwasi Kwarteng, the UK's business secretary, said: "Unlike Europe, we're not reliant on Russian gas. But like others, we are vulnerable to high prices set by markets. The situation we are facing is a price issue, not a security of supply issue. Put simply: we have lots of gas from highly diverse and secure sources－but it is very expensive."

The Daily Telegraph reported that the British government is working with European allies to increase deliveries of liquefied natural gas at ports across the continent, in order to lower dependence on Russian gas supplies.

If this was achieved, then new sanctions could target Russian energy companies.

The UK, the United States, and others have so far resisted imposing sanctions on Russian gas giants including Rosneft and Gazprom.

According to The Telegraph, fossil fuels account for more than 60 percent of Russia's exports.