Europe’s benchmark gas price crossed 100 per megawatt hour on Wednesday for the first time since the 2022 energy crisis. The Dutch TTF front-month contract traded at 100.37 at 16:00 CET, up more than 4% on the day, according to Euronews. Prices were around 32 before the war with Iran began in late February, which means they have roughly tripled in eight months. Hours earlier, EU Energy Commissioner Dan Jørgensen told reporters that “Europe faces another energy crisis” and that this winter would be difficult for citizens and for the economy as a whole.
There is a case that Europe is better placed than it was in 2022, and that the price, though painful, is not a repeat of that crisis. At 100 the contract is still less than a third of the roughly 340 peak recorded in August 2022. Gas demand across the bloc is around 20% lower than before that crisis, according to the EU’s energy regulators agency ACER, which reduces the amount that must be bought at high prices. The United States now supplies roughly 30% of EU gas, so Europe depends less on any single supplier than it once did. Those changes are the result of several years of adjustment, and they give governments more room to respond than they had the last time prices surged.
The warning signs are still serious. Storage was 75% full on October 21, according to ACER, against the usual target of 90% by November 1, which leaves less of a buffer if the winter turns cold. ACER estimates that the war has already raised Europe’s gas import bill by between 18 billion and 33 billion, and almost no Qatari liquefied natural gas reached the EU over the summer. Europe will also compete with Asia for spare cargoes this winter. Jørgensen said fuel bills in the bloc were “skyrocketing,” and with the price roughly three times its level in February, the burden on households and on energy-intensive industry is heavy. Storage sites were just 28% full at the end of last winter, against a nine-year average of around 40%, so refilling has started from a low base.
The consequences extend across the whole continent. Gas sets the price of electricity in many markets, so higher gas prices spread into factory costs, household bills and inflation, and weigh on a European economy that is trying to grow. The pressure could also shape political choices on subsidies, joint purchasing and long-term supply deals, which are already under discussion, including a possible long-term LNG agreement between the EU and Canada, according to a draft statement for a summit in Montreal. Governments must decide how much to spend to cushion consumers without undermining efforts to reduce demand, and that balance will be tested as temperatures fall. Around a quarter of European refineries have closed over the past two decades, and the European Commission expects the global diesel market to stay tight into 2027, so the pressure is not limited to gas.
Europe is more resilient than in 2022, but it is not insulated from the shock. How far prices climb from here will depend on the war in the Middle East and on how cold the winter turns out to be.
