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- The most important thing is the weather: how the freezes have inflated gas prices in the EU
The most important thing is the weather: how the freezes have inflated gas prices in the EU
On January 22, the price of gas in Europe rose again above the psychological mark of $500 per 1,000 cubic meters, the highest since March last year. The growth per day was 4%. The reasons are obvious: unusually for the last decade, a cold winter led to a rapid depletion of reserves. Meanwhile, the market is also affected by the situation on other continents, where it is also extremely cold. About whether the European Union is in danger of a new gas crisis and why American gas may not always be a panacea, see the Izvestia article.
In 2024-2025, it seemed that the European energy system had adapted to the new reality. For many months, gas prices in the EU have been showing a steady downward trend, reassuring politicians and businesses. However, the beginning of 2026 showed that this calm was temporary and was sustained by a combination of abnormally warm winters and an industrial recession. As soon as the real Arctic cold came to the Northern Hemisphere, the price balance was shaken again.
On European stock exchanges, the price of gas has again surpassed the psychological mark of $500 per 1,000 cubic meters. This has become an indicator of certain structural problems that will fully manifest themselves not only by the end of winter, but also during the preparation period for the next heating season.
Emptying reserves
The main indicator of the problem was the condition of underground gas storage facilities (UGS). If Europe ended last winter with record reserves, now by mid-January the filling level of UGS in the EU countries has dropped below 49%. Since the beginning of the heating season (mid-October), more than 43 billion cubic meters of gas have been extracted from storage facilities.
The figures indicate that net consumption, that is, excess intake from UGS deposits, exceeded all expectations. Unlike last year, when the UGS facilities were filled by almost 80% by this point, the current figures force analysts to revise forecasts. Wood Mackenzie estimates that European inventory levels could fall by up to 25% by the end of March. This will be the lowest level in the last five winters.
The problem here is not so much the risk of "freezing" (modern regasification infrastructure is likely to avoid this even in a crisis situation), but the cost of subsequent recovery. UGS facilities that have been emptied to near-zero levels will have to be filled in the conditions of the "seller's market", which guarantees high quotations throughout the spring and summer of 2026.
Molecules of freedom
The European energy market has ceased to be isolated since pipeline supplies from Russia were replaced by liquefied natural gas (LNG). Now the price in Rotterdam or London directly depends on the weather in Texas and Shanghai. Meanwhile, in the United States, the Arctic cyclone has caused real chaos at gas hubs. Futures on the Henry hub have jumped more than 40% in the last two days alone, and this is the sharpest weekly increase in the last 35 years. In absolute terms, prices in the United States have risen from about $120 to $166 per 1,000 cubic meters.
This is bad news for the European consumer for two reasons. First, extreme cold in Texas and the Midwest threatens to freeze production at wells in the Marcellus and Bakken basins. This physically reduces the amount of gas available for liquefaction and shipping to ports.
Secondly, domestic demand for electricity and heating in the United States is growing at an unprecedented pace. When American households and LNG export terminals start competing for blue fuel, the price inevitably goes up. Moreover, the administration of Donald Trump is already making it clear that the "energy dominance" of the United States implies, first of all, the protection of its own consumer.
US President Donald Trump
All this threatens to significantly increase prices in the near future. According to Sergey Kaufman, an analyst at FG Finam, new highs are just around the corner.
— If February also surprises the market with a cold snap, then we do not rule out a price increase closer to $600 per 1,000 cubic meters, that is, approximately to the highs of February last year. However, a lot will depend on the weather in the short term. In the medium term, we expect a gradual decline in prices closer to $400 per 1,000 cubic meters. Rapid inventory consumption this winter will, of course, increase the need for imports, which most likely will not allow prices to fall to the lows of last year," he stressed.
Deindustrialization as a temporary anesthetic
It turned out that even a sharp decrease in gas consumption in Europe does not save it from price shocks. In the last two years, the EU has demonstrated "success" in saving energy, but a significant part of these savings has been achieved not through energy efficiency, but by shutting down energy-intensive industries. The chemical industry, metallurgy, and fertilizer production in Germany, France, and the Netherlands either reduced capacity or moved it to regions with cheaper raw materials, such as the United States.
The deindustrialization of Europe created a false sense of security: it seemed that if demand fell, then there would be enough gas. However, the current price increase shows that even this "reduced" demand is extremely temperature-sensitive. The energy balance has become so tight that any failure in the delivery schedule from Norway or the delay of a tanker from the Gulf of Mexico cause surges on the stock exchange. Europe has lost its safety cushion in the form of stable pipeline flows, which previously could dampen such fluctuations.
Environmental filters and political barriers
In the long term, the situation is complicated by new regulatory requirements from Brussels. The EU's commitment to carbon neutrality is superimposed on dependence on imports. The planned strict requirements for the methane content in the extraction and transportation of imported gas (primarily from the United States and Qatar) actually impose an additional "tax" on each molecule.
American producers working in shale basins are already expressing concern: the need to certify and modernize infrastructure to meet EU standards will require billions of dollars in investments, which will inevitably be included in the final cost of gas for Europeans. Thus, even if there are physical volumes on the world market, their availability to the EU will be limited by political and environmental filters.
By 2027, the EU plans to completely abandon the import of Russian LNG, which still occupies a significant share in the ports of Spain, France and Belgium. The loss of this source, which provides some flexibility to the system, will make the European market even more vulnerable to price volatility in the United States.
The geopolitical risks have not disappeared either. Trade disputes between the Donald Trump administration and Brussels, including the Greenland crisis, may lead to the use of LNG supplies as an instrument of political pressure. Washington no longer hides that it considers energy as a tool of domination, and the conditions of the coming reality may prove extremely burdensome for Europe.
In general, the European Union finds itself in a phase of energy instability. This winter will be able to pass without large-scale restrictions. But the problems will fully manifest themselves later, in April-June, when the emptied storage facilities will need to be filled against the background of expensive American gas and aggressive demand from China. As a result, almost every winter, the state of the European economy will depend on the temperature chart.
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