The European gas market is now much calmer after many years of intense fluctuations when the region replaced Russian gas with imported liquefied natural gas (LNG).
And this strategy is unlikely to change, even if US President Donald Trump succeeds in pushing for a peace deal in Ukraine.
If a peace deal is reached, Russian oil and gas could soon be traded more openly but it is still difficult to change the general context of gas in Europe.
This week, European TTF gas prices fell below 30 euros/MWh, the lowest level of the season since the Russia-Ukraine conflict broke out in February 2022. Gas prices continued to fall 2% on November 25 after Kiev partially approved the US peace proposal.
This development reflects the profound changes in the European gas market since the conflict and the sanctions imposed by the EU on Russia.
After the region's worst energy crisis in 50 years, Europe has escaped over-reliance on Russian gas transported via pipelines, shifting strongly to LNG, mainly supplied by the US.
After 3 worrying winters due to the risk of running out of gas stations, the market has now turned to a new normal state with stable supply and less worry.
Recent gas price developments clearly show that. The cold front that swept through northwestern Europe last week caused gas consumption to skyrocket, demand in this region increased by 80% compared to a week before, according to data from the London Stock Exchange (LSEG).
Europe's gas reserves are currently at around 79% of capacity, down from 88% in the same period last year and below the 10-year average (86.5%), according to Gas Infrastructure Europe.
A few years ago, these developments could trigger a fierce price increase and make the private sector worried. This year, European gas prices have remained almost unchanged.
The reason is the abundant LNG, mainly from the US, helping to stabilize market sentiment. In addition, the weather is forecast to be more gentle in the next few weeks.
However, risks still exist. A prolonged cold spell in Europe or Asia could increase LNG competition and make the market more tense. However, the possibility of major price shocks is not high in the current context of supply and demand.
A ceasefire in Ukraine is unlikely to have a profound impact on the developments of the European gas market. News of the deal could cause price fluctuations in the short term, but it will be difficult to maintain for a long time.
Even if energy sanctions on Russia are eased, European governments will remain cautious about returning to dependence on Russian gas after the 2020 shock.
Some Russian gas flows may return, especially to landlocked countries in Central and Eastern Europe, and Russian LNG projects could add to global supply. But most of these flows will probably still be consumed outside of Europe as they have been in the past two years.
