Gas prices in Europe return to pre-crisis levels
On the eve of the second anniversary of the war in Ukraine, fuel has retreated to values below EUR 23/Megawatt-hour
3' min read
3' min read
The price of gas in Europe is back to pre-crisis levels, falling below 23 euros per Megawatt-hour. And as chance would have it, this happens exactly two years after the start of the war in Ukraine. A coincidence of high symbolic value, but a coincidence nonetheless.
Gas at pre-crisis levels, however, does not mean the lowest for two years: it was not since May 2021 that fuel had traded at these levels at Ttf, the Dutch hub that serves as a reference for the Old Continent. Almost three years ago then. Moscow's troops only breached the Ukrainian borders on 24 February 2022, but tensions on the market had already been building for some time, triggered by apprehension over the excessively low level to which stocks had fallen and by the first tightening by Gazprom, which had stopped offering additional volumes compared to those guaranteed by contracts.
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The rally culminated in summer 2022
.After the invasion of Ukraine, there was an acceleration of the energy price race, which became increasingly wild with the 'cuts' in Russian supplies. The gas rally culminated during the summer of 2022, when prices even surpassed EUR 340 per Megawatt-hour: a vertiginous surge, fuelled by the European governments themselves, who unleashed a veritable assault on supplies in order to fill their storage depots in preparation for the cold season.
Purchases that were probably inevitable, in defence of energy security, even if today a hefty bill remains to be paid, which will end up being borne by consumers through increases in bills or through general taxation. Germany and Italy, once Gazprom's largest customers, have estimated a loss of EUR 10 billion and EUR 4.8 billion respectively for that stockpile assault.
Never stayed in the cold
.The crisis triggered by rising gas prices has weighed heavily on the European economy and continues to do so. But the most feared emergency has never happened: we have never been left in the cold or in the dark, neither last winter, when the hypothesis of a blackout was really realistic, nor this winter, during which gas prices have never stopped falling: they even more than halved during the heating season, dropping to a low of 22.355 euro/MWh on Friday 23rd at Ice.
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