Europe’s gas market rose by as much as 5% on Thursday to its highest price in a year after one of the continent’s biggest gas traders said that there could be a halt on gas supplies from Russia.

Austrian gas trader OMV has said that a court decision awarding the company compensation after its dispute with a subsidiary of Russia’s Gazprom could lead the state-owned gas giant to halt supplies.

Gas prices on Europe’s main gas market jumped to more than €45 a megawatt hour for the first time since November last year amid fears that Europe could face higher risks of tight gas supplies this winter if OMVs gas supplies are cut off.

In the UK the price of gas on the wholesale market price climbed by almost 3% from its close on Wednesday to trade at just more than 114 pence per therm by Thursday morning.

Europe’s gas market prices remain well below the historic highs of over €300/MWh in August 2022 after Russia’s invasion of Ukraine earlier in the year

OMV was awarded €230m ($243m) under International Chamber of Commerce rules after its row with Gazprom over its supply contract. It plans to recoup this amount from Gazprom by withholding its monthly payments for gas, but this could prompt the Russian company to halt deliveries.

Tom Marzec-Manser, the head of gas analytics at ICIS, told the Guardian that the situation could come to a head as early as next week when OMV’s next monthly payment is due.

“OMV may withhold this next payment, which would be around €213m, but this could trigger Gazprom in cutting that contract off immediately. The live OMV contract is just under half the gas that is transiting Ukraine currently,” he said.

Typically about 38m cubic metres of Russian gas enters the EU via Ukraine every day, and OMV’s deal would see almost 17m cubic metres a day flow into Austria. The company said that it would be able to continue delivering gas to its customers even in the event of a potential gas supply disruption from Gazprom Export by tapping alternative sources.

Separately, Austria’s energy minister, Leonore Gewessler, said the country’s gas supplies were secure because it had been “preparing for a possible supply disruption for a long time” and its gas storage facilities were full.

“Austria can and will manage without Russian gas,” Gewessler wrote on X. “Nevertheless, it is clear that a sudden interruption in supply could cause tension on the gas markets.”

Before the court ruling gas market analysts at Rystad Energy had expected gas prices to fall due to widely available gas supplies across Europe and in the global market.

The International Energy Agency has predicted that fossil fuels will become significantly cheaper and more abundant by the end of the decade because companies are producing more oil, gas and coal than the world needs.

In its monthly oil market report, published on Thursday, the global watchdog said the world’s oil supply will outstrip demand as soon as next year even if the Opec oil cartel and its allies keep a lid on their production due to rising oil production from countries including the US outpaces sluggish demand. This should bring down the price of petrol and food, according to the World Bank.

At the moment Europe is well supplied with gas due to “materially stronger” flows of gas into the continent from Norway and weaker overall gas demand due to strong renew ables over the year, Rystad said.

Rystad’s data shows that the continent’s imports of gas on seaborne vessels, known as liquified natural gas, rose 17% in October compared with the month before to help restock gas stores for the winter but this was still 16% lower than last year, reflecting weaker demand as a result of strong renewable energy generation this year.

Russia’s supply of gas to Europe plummeted after the Kremlin launched an invasion of Ukraine in early 2022. The remaining pipeline flows over Ukraine are expected to end in December, when a transit agreement with Kyiv expires.