European gas prices have returned to pre-war levels, but that doesn’t mean they’re back to normal. While much has been achieved over the last year, including the rapid build-out of new import infrastructure, there are still serious challenges ahead.

As 2022 drew to a close, the ICIS TTF European gas price was falling back to pre-war levels. Month-ahead TTF fell to €80/MWh and below in late December, dropping under the €88.70/MWh closing price recorded on February 23, 2022, the day before Russia’s invasion of Ukraine.

That doesn’t mean, though, that gas prices are back to “normal”. The market was climbing higher well before the war started, gaining throughout the second half of 2021 as the market debated a downturn in Russian pipeline flows and grew increasingly concerned about the rising geopolitical tensions already apparent.

A better comparison is with prices during the first half of 2021, or the long-run average over the previous decade, both of which work out closer to €20/MWh. On that basis gas was still four times more expensive than normal, even if it had dropped back from the extraordinary price spikes of summer 2022.
Source: ICIS by Alex Froley, https://www.icis.com/explore/resources/news/2023/01/03/10841438/icis-analyst-viewpoint-new-year-new-gas-market/