European gas prices on Monday rose to their highest level since early April 2023. This is the result of the continued cold weather, depleting gas reserves, and the imminent threat of US tariffs on the bloc.
The gas price on the leading Dutch futures market climbed to €58 per megawatt-hour (MWh) at 07:00 on Monday morning. This marks the highest level in almost two years, since the beginning of April 2023.
The increase is a result of low temperatures depleting European gas reserves. Temperatures in Belgium have remained below 10°C for several weeks now, while they have been around or below zero. In the coming days, temperatures in northwestern Europe are expected to drop again, which means more people will turn on their heating.
This rising demand will cause European gas reserves – already at their lowest level since the start of the energy crisis in 2022 – to fall even further. This will likely cause prices to rise.
US tariffs
The higher price also stems from the threat of US tariffs, as President Donald Trump has repeatedly said he plans to impose import tariffs on European products.
The EU has already said it will respond in kind. Trump previously called on the EU to purchase more American oil and gas to avoid tariffs. The US is already Europe's largest supplier of liquefied natural gas.
Traders are also seeking to hedge against further price increases due to potential US sanctions.
However, the situation is not yet as alarming as at the start of the energy crisis. By comparison: in the first six months after the Russian invasion of Ukraine (February 2022), the gas price rose to almost €350 per MWh.
