European natural gas prices on the TTF benchmark rose above 35 EUR per megawatt-hour in mid-January, as a cold snap across Northern Europe increased heating demand. While prices remain far below the August 2022 peak of 340 EUR/MWh, the increase highlighted Europe's continued vulnerability to energy supply disruptions, particularly as the final Russian gas transit route through Ukraine expired on January 1, 2026.
The End of Russian Pipeline Gas to Europe
The five-year transit agreement between Russia's Gazprom and Ukraine's Naftogaz expired without renewal. This ended the last significant flow of Russian pipeline gas to Central and Eastern Europe, affecting countries including Austria, Slovakia, and Hungary, which had continued receiving Russian supplies. These nations have been scrambling to secure alternative LNG and pipeline supplies from Norway, Algeria, and Azerbaijan.
Before the conflict in Ukraine, Russian gas accounted for approximately 40% of EU gas imports. By 2025, this had fallen to less than 8%, with liquefied natural gas (LNG) from the United States, Qatar, and Australia filling much of the gap.
LNG Supply Dynamics
Global LNG supply has expanded significantly, with new export capacity coming online in the US (Golden Pass, Plaquemines), Qatar (North Field expansion), and Mozambique. These additions are expected to ease the market through 2027. However, competition for LNG cargoes has intensified, with Asian buyers, particularly in China, Japan, and South Korea, often outbidding European importers when prices spike.
European gas storage levels entered winter at 89% of capacity, above the 90% target the EU had set for November 1. However, a sustained cold period could draw down reserves faster than expected.
Impact on Energy Bills and Industry
European household energy bills remain approximately 30-40% above pre-crisis levels in many countries, even as wholesale prices have normalised. Energy-intensive industries, particularly in Germany (chemicals, glass, ceramics), continue to operate at reduced capacity, with some companies relocating production to the US or Middle East where gas is cheaper.
The higher energy cost structure also affects Bitcoin mining economics in Europe, where electricity prices of 15-30 cents/kWh make mining largely unprofitable compared to regions with sub-5 cent power.
For TTF gas prices, visit Trading Economics. For European gas storage data, see Gas Infrastructure Europe (AGSI).