European gas prices are expected to soar next year. Analysts predict a significant increase of 12%, causing concern among consumers and businesses alike.

The Center for Price Indices predicts that gas prices in Europe will increase substantially in 2025. The reasons behind this surge include a potential halt in gas supplies through Ukraine and increased fuel withdrawals from storage facilities.

This price increase will affect the entire region, with the Dutch TTF hub expected to climb to $422 per 1,000 cubic meters. CPI analysts have revised their September forecast upwards by 28%, with previous estimates predicting a price of $329 per 1,000 cubic meters in 2025. Currently, the average price of gas stands at $375 per 1,000 cubic meters.

The anticipated price surge can be largely attributed to reduced imports of Russian gas and accelerated gas withdrawals from underground storage in the EU. Against this backdrop, the average export price for Russian pipeline gas has risen from $266 to $288 (down 0.7% year-on-year), with a forecast of $290 in 2024.

While there is a high probability that gas transit through Ukraine will be reduced or even halted, analysts predict an increase in Russian gas exports, from 114 billion cubic meters to 117 billion cubic meters. This is mainly due to increased exports to China via the Power of Siberia pipeline. This pipeline also transports gas to Uzbekistan and Kazakhstan. At the same time, many experts believe that gas flows through Ukraine will be reduced but not completely blocked. Countries such as Slovakia, Moldova, and Austria remain interested in Russian gas, and optimal transit schemes will be developed, transferring gas rights at the Russian-Ukrainian border. Earlier, German Vice Chancellor Robert Habeck noted that the absence of Russian gas had driven German businesses into a corner.