The interruption of Russian natural gas flows through Ukraine from the beginning of 2025 and the colder winter than in previous years in much of Europe led to a rise in natural gas prices in the region, which, however, appears to be “controlled” and have nothing to do with the crisis conditions that prevailed two or three years ago.

The quantities of Russian gas taken by Central-Eastern European countries, such as Slovakia and Austria, through the pipeline passing through Ukraine, corresponds to only 5% of Europe’s total demand and therefore can be met relatively easily, with additional imports of liquefied natural gas (LNG).

The potential for LNG imports is higher this year as export capacity from the US, Europe’s largest supplier, has increased with the addition of two new major liquefied natural gas conversion facilities. At the same time, LNG imports from Russia also increased to record levels in 2024, ensuring that the region’s needs are met, even in harsher winter conditions.

According to data cited by Reuters, Europe’s total LNG imports jumped 23% from November to 10.89 million bcm. cubic tons, although they were 7.9% lower than a year ago.

On the other hand, increased demand for natural gas for heating has led to a decrease in the European Union’s reserves, with the fullness of its underground tanks standing at 68.2% on January 8 compared to 83.5% a year ago, according to with data from KYOS European Gas Analytics.

The reduction in inventories is likely to keep natural gas prices at higher levels than last year, but crisis conditions like those seen from the fall of 2021 to the end of 2022 are by no means on the horizon. It is noted that at the peak of the crisis, in August 2022 the reference price on the Amsterdam Stock Exchange (TTF) shot up to €250 per megawatt hours, 10 times higher than the average of previous years.

In 2023, TTF prices descaled, thanks to the replacement of the missing quantities – due to the shutdown of the Russian Nord Stream pipeline – with Norwegian gas and with LNG imports from a number of suppliers, the first of which is the USA.

In January 2024 prices moved below €30 per megawatt hour, but then moved upwards and from May exceeded €40, as market players had since expected flows through Ukraine to stop. The country’s president, Volodymyr Zelensky, had repeatedly stressed that he would not sign an extension of the 5-year gas transit agreement with Russia, which was set to expire at the end of 2024, as it did.

In other words, the disruption of flows through Ukraine was effectively discounted by the market to a large extent. This also explains the fact that the prices marked an escalation in the second fortnight of the previous month, reaching a little over 50 euros on the first working day this year, but then deescalated again and on Friday they were below 44 euros.