Quantitative Analysis /

European natural gas prices to triple from here

  • European natural gas prices have more than doubled to EUR150 per MWh since the beginning of the year

  • We forecast a rise to as high as EUR450 over the next six months, a staggering threefold increase from today

  • Europe plans to reduce its reliance on Russian natural gas by 66% by accelerating investment into energy technology

European natural gas prices to triple from here
James Huckle
James Huckle

Quantitative Analyst

Tellimer Research
10 March 2022
Published byTellimer Research


European Natural Gas prices hit an all-time high of EUR345 per MWh earlier this week, but have fallen back to EUR150 as the market continues to try and price in the impact of a Russian flow cut, be it due to the conflict in Ukraine causing physical disruption to gas transit, or a ramp-up in sanctions cutting flows all together.

Russian natural gas currently accounts for c40% of all the EU's natural gas imports, but Europe is hastily planning to reduce its consumption of Russian gas by as much as two-thirds this year as it prepares to achieve energy independence from Moscow.

Substituting natural gas is difficult because generally it is delivered via purpose-built pipelines directly from the source. However, the EU is hoping that accelerating investment into clean and efficient energy technology will ultimately help lower the demand.

Quantitative 12-month forecast

Our machine-learning model forecasts natural gas to remain volatile and to continue to rise over the next six months, hitting a peak of EUR450 in September – a staggering threefold increase from today. But thereafter, volatility is expected to taper off as the price falls back to EUR150-200 by the end of the year.

Who is the most affected?

If the supply of Russian natural gas were to be disrupted, Germany and Italy would be especially affected as they import a combined 36% of all exported Russian gas.

Russian natural gas exports

Europe could turn to existing gas exporters such as Qatar, Algeria and Nigeria, but there are practical obstacles to quickly expanding production.

Russia only provides about 5% of the UK's gas supplies, and the US doesn't import any Russian gas (and hasn’t since 2019).

However, prices in the UK and US are still up significantly due to the knock-on effect of supply shortages.

Global natural has prices