VIENNA (Reuters) - Austria's far-right Freedom Party (FPO), which won September's parliamentary election with 29% of the vote, is due to start coalition talks with the conservative People's Party (OVP) this week aimed at creating the country's first FPO-led government.

In the first trading day after Ukraine ceased the flow of Russian gas and oil, benchmark natural gas prices in Europe surged 4%.

Austria has insisted it is well prepared for the stoppage, but Slovakia has threatened to cut electricity supplies to neighboring Ukraine.

Vienna could be about to get its first far-right leader since World War II. Europe’s mainstream sees trouble brewing.

Since January 1, when the transit of Russian gas through Ukraine stopped, in Austria and Slovakia has sharply increased gas extraction from storage facilities, and Austria and the Czech Republic have resumed fuel imports through Germany.

The ongoing conflict has highlighted the importance of diversifying gas supplies to build resilience against geopolitical risks.

The Freedom Party and its leader, Herbert Kickl, have steadily built support by demonizing immigrants, while entering Austria’s political mainstream.

With transit routes through Ukraine for Russian gas cut off, a few EU countries now need to rethink their gas supply. For others – including Germany and Switzerland – the impact will be minimal.

Austria's OMV has struck a deal to supply Germany's Uniper with gas from its Black Sea project from 2027, three people familiar with the matter told Reuters, as Europe seeks new ways to boost energy security after cutting ties with Russia.

U.S. President-elect Donald Trump takes office on January 20 having criticized continued U.S. military aid for Ukraine's fight against Russia. This may shift the onus on support for Kyiv to fall on other allies, particularly in Europe, where a changing political leadership since his election could complicate matters.

Austria’s Freedom Party, which is starting talks to lead the government, opposes sanctions on Russia and the EU’s support for Ukraine.

Austria's far-right Freedom Party (FPO), which won September's parliamentary election with 29% of the vote, is due to start coalition talks with the conservative People's Party (OVP) this week aimed at creating the country's first FPO-led government.