With the cessation of Russian gas deliveries via Ukraine, gas prices in Europe increased by up to 4.3%. With 51 euros per megawatt hour, they reached their highest level since October 2023.
Russian gas deliveries via Ukraine were cut off on New Year’s Day after Ukraine failed to renew the transit agreement with the enemy country. An important supply pipeline for several Central European countries dried up at the end of the year.
No shortage this winter
Traders observe that the absence of Russian deliveries will lead to a faster reduction in gas reserves. These are already decreasing across the continent at a rate that has not been observed since 2021, when the gas crisis was just beginning to take shape.
The supply cutoff coincides with forecasts of subzero temperatures in some countries, which will increase demand for heating. In Slovakia, one of the countries most affected by the shutdown, the mercury could drop to -7°C by mid-January.
Although Europe is unlikely to experience a gas shortage this winter thanks to gas reserves and deliveries from other suppliers, distributors may find it more difficult to fill their reserves for the next heating season. Gas prices for next summer have recently exceeded those for winter 2025/26, which will make it more expensive to refill stocks.
“There is a growing risk that the EU will end the winter with low gas storage levels, making them costly to refill,” said Arne Lohmann Rasmussen, chief analyst at Global Risk Management in Copenhagen.
Deliveries of Russian gas to Europe currently only go via one route (a gas pipeline that passes through Turkey and carries the fuel to Hungary). Deliveries via this link are closely monitored.
Belgium
