Russian president Vladimir Putin eased market tensions yesterday with a promise to increase gas supplies across Europe, with prices rocketing at present thanks to the supply chain issues hindering the transit of fuel, as well as other resources.

UK gas prices surged to an all-time record of almost 400 pence per therm yesterday, before settling back at 287p and then dropping to 267p following Russia's offer of assistance. Oil is also up, having hit a seven-year high in US terms on Wednesday and a three-year high for Brent crude oil in Europe.

Limited availability of fuel is inevitably inflating prices, but the UK seems to be paying a greater cost for it; maybe because of Brexit rule changes, but definitely because of driver shortages. Three weeks ago data revealed the largest monthly jump of UK inflation since 2012, putting pressure on public and business spending. For months and months inflation has been declared “transitory”, but the British public is starting to feel the pinch, with energy, fuel, and food all rising sharply in the pandemic.

The Nord Stream 2 pipeline route. Image courtesy of nord-stream2.com.

Russian state supplier Gazprom is expected to set a new national record for gas sales to Europe as a result of the proposal, but journalists and analysts have pointed out that this could be political gameplay from Putin to help the Nord Stream 2 gas pipeline project gain its final accreditations.

The pipeline (above) is an undersea venture through the Baltic from Russia to Germany. At present, Germany has not signed off on the safety and certification of the pipeline, meaning Russia legally can't use it to export gas westwards at the moment. They can still sell to Europe via other means however.

Some European MPs have gone as far as accusing Putin and the Kremlin of holding supplies of gas back, given the new pipeline would double Russia's gas export capacity – a big moneymaker. President Putin argued against this though, telling Russian television “They've (the EU) made mistakes” and blaming the pursuit of spot market purchases rather than long-term contracts.

Jeffrey Halley, an analyst at OANDA, perhaps summed it up best when talking to The Guardian newspaper: “Mr Putin’s comments were high on rhetoric but very low on detail such as how much and when. The message is fairly clear though, you can have all the gas you want in the future, you just need to sign here…”