European gas supplies are likely to look increasingly vulnerable this winter if the conflict between Ukrainian and Russia continues, one energy company is warning today.

Fears that the crisis could escalate into full-scale war sparked a month of volatility in natural gas prices in August. Figures released today by Bord Gáis Energy show Natural Gas prices rose 9 per cent from July to August.

Bord Gáis trader John Heffernan points out that Russia's Gazprom is not supplying Ukraine with natural gas and the two states are locked in a dispute over prices and outstanding debts.

"As we approach winter, the gas markets throughout Europe will become increasingly concerned that in the absence of an interim solution European gas supplies will look increasingly vulnerable as Ukrainian gas demand rises and European stocks are eroded," Mr Heffernan said.

“With Ukrainian stock levels far below where they are required heading into winter, the markets fear that Ukraine may be forced to siphon off Russian gas bound for western Europe, leaving it more exposed in the peak demand period,” he added.

While wholesale natural gas prices remained below 40p sterling a therm – the unit in which it is sold – in the early part of August they hit a monthly high of 45p in the second half.

British gas prices determine what is paid in Ireland, as most of the gas used here is imported from there.