Most years, few have to worry about natural gas from April to September. In Europe, the winter season is over and, barring a small number up north, everyone else switches off the heat. But 2025 will be different. Europe will need to worry about gas exactly when it shouldn’t: during the spring and summer.
The result will be another year of high gas prices, further darkening the future of the region’s energy-intensive manufacturing sector. Households, too, will feel the hit. The higher-for-longer outlook for gas prices just got a bit higher and longer. The cost of gas in Europe, measured by the so-called Title Transfer Facility benchmark in the Netherlands, has risen above €50 ($51.41) per megawatt hour, among the highest price levels over the last two years.
The reasons are twofold. First, Ukraine – understandably — didn’t renew at the end of 2024 a transit contract that allowed its archenemy Russia to ship gas into Europe via its pipelines. Russia doesn’t sell as much gas into Europe as it once did, but Moscow has remained an important supplier for countries including Slovakia, Austria, Italy, Czechia and Hungary. The loss of that Russian gas will force Europe to rely more heavily on other sources, such as US liquefied natural gas and its own storage.
But inventories aren’t unlimited. And here lies the second reason: Europe has already taken out an abnormally large amount of gas from its tanks. From Oct. 1 to Dec. 31, gas withdrawals from underground depots amount to over 250 terawatt hours, the second-largest ever for the period, and well above the 10-year average of 165 TWh.
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Publish date : 2025-01-05 21:00:00
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