CHENNAI, Jan 28 (Reuters) – Global coal prices have shot back towards record highs as the Ukraine crisis raises expectations that European buyers will start loading up on the fossil fuel for fear that a standoff between Russia and western nations will cut off gas supplies.
The benchmark Newcastle coal index has soared by over a third this month to $262 a tonne, fuelled initially by a month-long export ban by top supplier Indonesia and now by worries that any military engagement in Ukraine will sever gas supplies from Russia.
Europe relies on Russia for around 35% of its natural gas, and has been grappling with a gas shortage since last summer that sent local prices to record highs late last year.
Gas prices started to ease in recent weeks as imports surged, but have rallied again as the escalating tensions with Russia raise concerns about a potential supply disruption.
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