Given the supply shock that hit global LNG markets as a result of the conflict in the Middle East, the Wood Mackenzie Energy Information Group indicated that this turmoil, which led to higher gas prices, failed to destabilize Europe thanks to its investments in various types of fuel that served as a shield, insulating it from the halt in LNG exports in the Gulf.
Based on analysis by Wood Mackenzie, which compared wholesale power and gas prices in European and Asian markets during the 2022 Ukraine crisis and the 2026 Middle East conflict by examining generation mix changes, LNG supply additions, and price-setting mechanisms between January 2022 and April 2026, the Middle East conflict disrupted 80 million tons per year of Gulf LNG exports.
However, energy markets absorbed the shock through fuel diversification, with gas prices so far peaking at just $19 per million British thermal units in April 2026, compared to about $70 per million British thermal units in September 2022. The company explained that wholesale energy prices in Europe’s five major markets averaged just over €90 per megawatt hour in March 2026, largely unchanged from March 2025 and well below €280 per MWh registered during the first period. Months of the Ukrainian crisis.
The company’s data shows that the supply shock matches the size of Russia’s 2022 curtailment in Europe. WoodMac points to three factors that have led to price containment, including warmer weather, which left European storage down 28% at the end of March, startups adding 40 million tons per year of new LNG supply year-on-year since the start of 2026, and lower LNG demand in China as the country turns to alternatives.
According to the energy intelligence player, Spain recorded its lowest wholesale power price of €42 per MWh in March 2026, supported by renewables penetration exceeding 60%, while rising solar availability enabled Germany to cut coal and gas generation from 46% in February to 39% in March. On the other hand, battery storage in Australia increased its share of price determination from about 2% in early 2022 to 20% by late 2025, while gas-fired power generation halved from 10% to less than 5%.
With gas prices falling to $15 per mmBtu, just 20% above the 2025 average, energy prices in Italy rose by 18%, Germany by 5%, and the UK by 3% year-on-year in March 2026, while average market prices in France and Spain recorded declines of 16% and 22%, respectively.
In addition, Japan’s nuclear plants now account for 10% of supplies, double the 2022 level; The Netherlands reduced coal and gas generation from 49% to 36% between February and March; Annual gas production in Europe has fallen by about 13% since early 2022.
The Ukraine war has shown Europe the benefits of diversifying away from volatile fossil fuels. He said Peter OsbaldstoneResearch Director, Europe Power at Wood Mackenzie.
“Battery storage and renewable energy are increasingly setting prices, reducing the impact of gas. This structural shift isolated energy markets when this crisis hit.”
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