Europe’s gas prices are surging. Who will be the first to pay more?
Europe could face its toughest winter gas season since 2022 as wholesale prices trade near their highest level in more than three years. Household bills could rise quickly in the Netherlands while taking nearly a year to fully adjust in Germany and Austria.
Gas and electricity bills could increase in Europe this winter if wholesale prices remain elevated long enough to feed through to consumers.
The benchmark European wholesale natural gas price, the Dutch front-month TTF, was trading at over €66 per megawatt-hour (MWh) later on Tuesday, down from above €68 earlier in the session. This compares with around €29/MWh at the beginning of the year.
The rally has been fuelled by growing investor concerns that the Strait of Hormuz could remain closed into the winter.
This comes at a time when the EU’s gas-storage levels remain historically low ahead of the heating season.
EU gas storage was 62.99% full at the end of the gas day on 24 August, according to data from Gas Infrastructure Europe.
“Europe's gas stores are unusually low for the time of year,“ Natasha Fielding, editorial manager for gas, LNG, coal and biomass at Argus Media, told Euronews Business. She added that this level was far below the five-year average of 79%.
“The only other time in the last 15 years that stocks were close to as low was in 2021, ahead of the last major gas crisis,” Fielding said.
Among the larger European markets with the lowest storage levels, Germany’s stores were only 51% full, while those in the Netherlands stood at 44.3%.
Oxford Economics pointed out in a report published on 13 August — before the latest icrease in gas prices — that EU gas consumption is around 15%-20% lower than in 2021.
It said the EU can operate with lower storage levels, although that would mean relying on more winter LNG imports. And that could leave the EU more exposed to competition with Asian buyers for available cargoes.
The competition is already intensified due to the effective closure of the Strait of Hormuz, disrupting a route that normally carries almost one-fifth of global LNG trade.
In a potential EU-Asia bidding war, wholesale prices could climb further.
At current levels, prices "will not be enough for Europe to manage storage through winter," Goldman Sachs analysts Samantha Dart and Laura Cyr wrote in a note cited by Bloomberg.
"In a scenario where Middle East energy exports normalise only gradually through 2027, we estimate that December 2026 TTF would likely need to move above €100/MWh," they said. That is 110% above Goldman’s €50/MWh base case, they added.
Oxford Economics said the EU might be forced to suspend parts of its ban on Russian gas imports if supplies tightened further. According to the latest European Commission calculation, Russia’s share of combined pipeline and LNG imports was around 12.5% in 2025.
In January 2026, the Council of the EU adopted a regulation to prohibit both LNG and pipeline gas imports from Russia beginning 18 March 2026, with transition periods for existing contracts. By the end of 2027, all Russian gas imports are due to be prohibited.
How quickly could household bills follow?
A brief price spike may have a limited effect, but a prolonged rally would gradually feed into new and renewed household contracts.
A jump in wholesale prices does not immediately push retail prices up. The headline TTF price can rise much faster than the EU’s effective import price, which reflects what importers actually pay after existing contracts and hedging arrangements are taken into account.
However, as suppliers’ contracts expire and they buy or hedge more gas at the new, higher market price, the effective import price gradually moves closer to the wholesale price.
Those higher costs may then be passed on to households when tariffs are revised or contracts renewed.
According to Fielding, the extent to which energy bills rise will depend on how long the price rally lasts and whether prices climb further in the coming months. Across the EU, "households on variable gas tariffs would be among the first to feel the effects of higher wholesale prices," she said, adding that the pass-through from gas to electricity bills is typically weaker.
"Countries with more liberalised retail markets tend to experience a more rapid pass-through," Fielding said.
According to Oxford Economics, it takes an average of about six months for changes in wholesale prices to be fully reflected in consumer prices. However, the timing varies widely between countries.
“The prevailing market structure — with 12- or even 24-month fixed-price contracts dominating — means that it takes nearly a year for peak pass-through in markets such as Germany and Austria,” the report said.
Consumer gas prices may respond within a few months in countries like France, Italy and Spain. In some markets, like the Netherlands, pass-through is almost immediate.
Oxford Economics named Italy as the most exposed country to a gas price shock among the large European economies, due to the “interplay of a relatively fast pass-through and a considerably above-average reliance on gas.”
However, the country currently has one of the highest gas-storage levels, according to data from Gas Infrastructure Europe.
Much depends on how cold the winter is.
Oxford Economics said, “The backbone of the EU’s space heating remains gas; hence, the EU’s gas prices remain hostage to outside temperatures in the coming winter.” The consultancy added that a sustained cold spell this winter would push up demand for heating and gas.
In their report predating the latest natural gas price spike, Oxford Economics said eurozone consumer energy prices — including gas, electricity and other household energy costs — could be as much as 15% higher year on year in the fourth quarter.
