When Putin turned off the valve, Europe was left in the freezing cold in the middle of winter.

As a result of Russia halting gas shipments to Ukraine, European gas prices increased by 4.3% on the first trading day of the year, rising to 51 euros per megawatt-hour. These levels have been recorded as the highest prices seen since October 2023. The storage occupancy rate has decreased to 72.16%.

GAS PRICES HAVE SOARED

European gas prices reached their highest level since October 2023, rising to 51 euros per megawatt-hour with a 4.3% increase on the first trading day of the year. Futures had risen above 50 euros in anticipation of a halt in flows on December 31.

GAS STOCKS DECREASING ACROSS THE CONTINENT

Following the expiration of the transit gas flow contract, gas shipments from Russia to Ukraine ceased on New Year's Day, and no alternative supply was provided. This situation raised concerns about whether the cessation of Russian flows, which are a significant source of supply for many Central European countries, would lead to faster gas withdrawals from storage. Gas stocks across the continent are decreasing at the fastest rate since 2021.

DISRUPTION OF GAS FLOW COINCIDES WITH A HARSH WINTER

The disruption in gas flow coincides with cold weather forecasts that will increase heating demand in some regions. In particular, temperatures in Slovakia are expected to drop to as low as -7 degrees by mid-January. While gas shortages are not anticipated across Europe this winter, it is expected that filling storage for the upcoming heating season may be more difficult and costly. Especially for the summer period, gas prices could exceed the winter prices for 2025-26, complicating stock replenishment.