Key developments in European gas markets

2024 Market Monitoring Report

In 2023, gas supply to Europe remained below the range that was the norm pre-Ukraine invasion. Yet with consumption also substantially lower, storage levels stayed at historic highs, leading to wholesale prices decreasing.
Gas hub price convergence improved but did not reach pre-energy crisis levels. New Liquified Natural Gas (LNG) import terminals and additional gas transportation capacity eased the network congestion that drove price differences to record highs in 2022. On the back of the same drivers, spot LNG and European wholesale prices also aligned in 2023.
Growth in renewables reduced the need for thermal power, easing gas market tightness and driving the EU’s shift towards clean energy and away from fossil fuels.
The likely end of the Ukraine gas transit agreement – coming in winter 2024/2025 – coupled with potentially increasing costs of cross-border trade could disrupt regional gas balances, calling for Member State preparedness and European solutions.
Looking further ahead, uncertainties in future gas consumption, lack of available alternatives to gas storage for seasonal flexibility, and persistent global gas price differentials call for the attention of policy makers and energy regulators. Europe can address these energy challenges by leveraging its strengths, such as enhanced market integration enabling energy to move freely across borders.