Europe’s natural gas prices have surged, recently reaching around €100 per megawatt hour (MWh), due to disruptions in Middle East shipping and the ongoing conflict in the region. These prices are now about three times what they were before the Iran war and are contributing to higher costs for oil, gas, electricity, and food. Analysts predict high gas prices will persist for at least another year, even if the conflict resolves and the winter is mild, as Europe needs to rebuild its gas storage, currently at record low levels.
As the heating season begins, gas storage levels in Europe are lower than needed, with Norway’s supplies falling short by 30% compared to last year. The Dutch front-month contract at the TTF hub reached €100 per MWh, and other contracts in Germany and France are also at high levels. The spike in gas prices is affecting consumer and industry bills, particularly for sectors like chemicals, fertilizers, and steel, which rely heavily on gas.
For consumers, changes in retail contracts mean that higher wholesale prices will mainly affect bills starting in 2027, with expected increases in January for British bills and a 55% rise in German gas tariffs for new customers this year. The European Union has allocated €17.9 billion to help households and firms cope with these rising energy costs.
With information from Reuters
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