economy
March 27, 2026
Europe on the verge of a new energy crisis due to rising gas prices: "Storage nearly empty, supply disruptions, rising inflation"
Gas prices in Europe have risen by 70 percent, storage facilities are almost empty, and supply disruptions, rising inflation, and prospects of tightening monetary policy by the European Central Bank (ECB) are raising fears of a repeat of the 2022 energy crisis.
TL;DR
- Gas prices in Europe have surged by 70%, with the TTF benchmark price rising significantly.
- Underground gas storage facilities across Europe are critically low, significantly below the five-year average.
- Supply disruptions are structural, not temporary, with Qatar unable to meet contractual obligations due to Iranian attacks, potentially requiring up to five years for repairs.
- Goldman Sachs forecasts higher gas prices and warns Europe will compete with Asian buyers for LNG to fill storage.
- Potential closure of the Strait of Hormuz could lead to dramatic price increases, with some analysts predicting prices exceeding 200 euros/MWh in severe scenarios.
- The energy price shock is translating into rising inflation across the Eurozone, reversing a three-year trend of slowing inflation.
- While direct pass-through for gas bills is expected, electricity price increases for households are partially absorbed by the market.
- Fuel prices are also affected by increased transport costs and refining bottlenecks.
- Italy, despite being in a better position with storage, is also vulnerable, with diplomatic efforts underway to secure supply.
- Analysts do not expect a repeat of the 2022 price peaks but anticipate a period of increased volatility and sustained price hikes.