What happened
According to the Financial Times, amid the escalation of the war in the Middle East, gas prices in Europe rose at the start of the week to their highest levels since 2023. The specific catalyst was the effective blockade of shipping through the Strait of Hormuz and strikes on facilities in Qatar, which forced one of the world’s largest liquefied natural gas (LNG) exporters to temporarily cut production.
Mechanism: why it hurts now
In short — competition for limited LNG on the global market is rising. As a result, wholesale prices in Europe jumped sharply: by some accounts, price changes since last Friday reached about 53%. At the same time, gas stocks in the EU remain significantly below average levels: according to Gas Infrastructure Europe, storage is filled to less than 30%, while the five‑year average for this period is around 45%.
"This is a double hit. Europe had only begun to emerge from an industrial energy crisis — and now it’s taking the next one."
— Henning Gloystein, energy expert, Eurasia Group
Key risks for Europe and Ukraine
The consequences are multifactorial. For the EU, there is a risk of renewed energy-driven inflation and a decline in industrial production; the ECB has already warned of likely pressure on prices and output. For Ukraine, three vectors are important:
- Financial: rising energy prices in Europe increase inflationary pressure, affecting the cost of imported fuels and logistics — important for the budget and infrastructure recovery.
- Agricultural and food: blocked fertilizer supplies and logistics problems threaten pricing and access to inputs for Ukrainian farmers, and thus export revenues.
- Geopolitical: under market pressure there may be temptation to quickly restore imports from politically dubious sources. Analysts at Rystad Energy note that one extreme option would be a return to Russian gas — however this is unlikely due to political unacceptability and objections from partners, including the United States.
"Refilling gas storage for next winter starts now. If that has to be done at these prices, it will be a huge burden for Europe."
— Simeone Tagliapietra, senior research fellow, Bruegel
Quick snapshot of the numbers
Current European gas prices are around €48.77 per MWh, which is far below the 2022 peak of roughly €340 per MWh, but the speed and amplitude of the current jump create different risks — notably for storage replenishment and industrial planning. Also, on March 2 oil prices rose by about 9%, and wholesale gas prices in the Netherlands jumped by more than 25%.
What partners — and Ukraine — should do
Given the risks, practical steps are needed, not declarations. European partners should accelerate signing long‑term LNG contracts, coordinate trans‑European supply routes and build up strategic reserves. For Ukraine it is important to:
- strengthen energy resilience — diversify sources and develop domestic capacity;
- coordinate with partners mechanisms to prioritize critical supplies (energy, fertilizers) and financial instruments to smooth price shocks;
- use diplomacy to ensure partners’ energy solutions do not open the door to politically risky choices (for example, legitimizing imports from the aggressor).
Conclusion
This wave of price jumps is not the end of the system, but a clear test of responsiveness and political will. Europe must quickly turn declarations of solidarity into concrete contracts and logistics; Ukraine should use this time to bolster energy and food resilience. While European institutions and markets react to the shock, the key question remains: can partners synchronize actions faster than market mechanisms inflict economic pain on societies in real life?
