Europe Avoids Energy Crisis as Natural Gas Prices Fall to 18-Month Low

Natural gas prices in Europe have slid to their lowest levels in almost a year and a half, a clear sign that the region has avoided a much-feared energy crisis.

Benchmark wholesale gas prices dropped nearly 5% last week to hit $52 per megawatt hour, their lowest price since September 2021 and a fraction of the all-time high of $340 achieved in August last year.

It is a turnaround that will be met with sighs of relief around a continent that only a few short months ago faced potential blackouts as Russia drastically lowered gas exports to Europe in retaliation for EU sanctions over its war in Ukraine.

The price drop can be attributed to atypically warm weather this winter, as well as the region’s energetic efforts to save gas, seek alternative suppliers and top up its storage levels.

Gas stores across Europe touched the 65%-mark last week, much higher than the 45% the region averaged at this point in the five years leading up to 2022. The bloc has replaced Russia’s gas with purchases from Norway, the US and Qatar.

The European continent appears to have successfully weaned itself off Russian gas. Even though the price of natural gas today stands much higher than its pre-war long-term average, current prices do not reflect a risk of shortages soon. This confirms experts’ expectations that Europe will avoid an energy crisis next winter.