The average price of gas in Europe in 2023 fell threefold, to about $464 per 1,000 cubic meters, according to data from the London ICE exchange on futures and TASS calculations. The main factors of this decline were warm weather, record high occupancy of gas storage facilities, and a decrease in gas demand in the European Union (EU).
Yearly comparison
In total, at the end of 2023, the fall in the price of gas in Europe was about 67%. The average cost of gas at exchange trading this year was about $464 per 1,000 cubic meters against $1,400 a year earlier.
Monthly breakdown
Supply disruptions
Some price increase since August was mainly caused by unplanned interruptions in gas supplies to the region. Such events were workers’ strikes at Australian Pacific LNG plants, the expansion of the military conflict in the Middle East, including the suspension of production at the Tamar gas field in Israel, and difficulties with shipping in the Red Sea. In addition, the Balticconnector underwater gas pipeline between Finland and Estonia was suspended due to damage.
Record gas reserves
However, by the beginning of the current heating season, European countries had accumulated a record 99.63% of gas reserves in their underground storage facilities, which made it possible to slow down the growth of prices by the end of the year. At the same time, gas consumption in the countries of Europe far abroad fell to the level of 1996, and in Europe, for the first time in the history of world energy, there is artificial destruction of gas demand, stated the head of Gazprom Alexey Miller.
The European energy crisis in the winter of 2022/2023 was significantly impacted by the war in Ukraine and the subsequent sanctions on Russia. The EU acted decisively, condemning the war and imposing sanctions on Russia, which had been a leading supplier of natural gas, oil, and coal. This situation triggered concerns over the EU’s energy security. Despite these challenges, the EU managed to fare better than initially feared due to efforts to save energy, increase shipments of liquefied natural gas (LNG), and find additional gas supplies.
However, the EU’s success was also due to favorable circumstances such as warmer-than-usual weather and lower LNG demand in China due to COVID-related restrictions. The prospects for the next winter remain uncertain, highlighting the EU’s dependency on outside suppliers for its energy security.
Follow Daryo's official Instagram and Twitter pages to keep current on world news.
Comments (0)