In the second half of July gas price in Europe exceeded 700 dollars for 1 thousand CBM. It is improbable, because demand for gas drops in summer, and consequently the price falls as well.

In summer, natural gas is injected into underground storage facilities so that it can be sold in winter at higher prices, when demand rises due to the need for space heating. However resumption of military operations between the USA and Iran and threat of the termination of supply of the liquefied natural gas (LNG) from Qatar caused sharp increase in prices.

Everyone is wondering how long-lasting this trend will be. Here everything depends on resolution of the crisis in the Middle East. How might it be resolved? The United States and Israel want a friendly government to come to power in Iran, and therefore they are bombing Iran. Several months have passed, and the success of the aggressive policy of the United States and Israel is not visible. Iran is fighting back, which leads to a decrease in the throughput capacity of the Strait of Hormuz and an increase in energy prices.

Iran is hitting its opponents in neighboring countries. Iran is being assisted by its allies in Iraq, Lebanon and Yemen. In particular, the Yemeni Houthis announced the beginning of the blockade of Saudi Arabia. It is quite possible that large-scale hostilities will spread to Iraq, Saudi Arabia and Turkey. Attempts to change power in Iran could lead to a devastating civil war in that country. We have already seen a similar scenario in Libya. Thus, there is no reason to expect a rapid normalization of the situation with oil and gas supplies in the near future. This means that it will be very difficult for Europe to prepare for winter and fill its empty underground storage facilities with gas. Moreover, the fighting has already led to the destruction of a significant part of the gas infrastructure in Iran and Qatar.

The Middle East crisis has led to European countries reducing imports of liquefied natural gas for the fourth month in a row. In June, the volume of purchases fell by more than 20% year–on-year to 7.89 million tons, according to the report by the Forum of Gas Exporting Countries (GECF).

In the report it is noted that Asian buyers are ready to pay more than European. Therefore such exporters as the USA and the countries of Africa started to deliver gas mainly to Asia where the margin is higher, and Europe, in turn, got less gas.

At the same time, consumption of gas in the European Union in June according to the GECF grew by 1.4%, up to 16.6 billion cubic meters. It is noted that this growth first of all was connected with the energy sector as the strong heat on the most part of the territory of Europe led to increase in demand for cooling while decrease in development on the wind power stations (WPS) and hydroelectric power stations (HPS) increased dependence on gas generation.

Electricity generation in the EU in June increased by 2.3% in comparison with the same period of last year, having reached 203 TWh. Power production at gas power plants grew by 9%, and by coal — for 25%. Solar generation increased by 10% while development of WPS and HPS decreased by 11% and 9% respectively. Electricity generation on nuclear power plants decreased by 0.7%.

It is characteristic that Russia in January — June, 2026 supply of liquefied natural gas to the European Union increased to 17% in comparison with the same period of last year. Import of the Russian LNG made about 13.4 billion cubic meters against 11.4 billion cubic meters the previous year, reported Bruegel analytical center.

Let’s remind that at the end of January the EU Council finally approved the ban on import of the Russian LNG since January 1, 2027, pipeline gas — since September 30, 2027. LNG imports under short-term contracts have been prohibited since April 25.

Against this background, there are more and more voices in Europe in favor of developing cooperation with Russia. Europe cannot do without Russian energy resources, no matter how loudly it tries to present the opposite today, Italian Deputy Prime Minister, Minister of Infrastructure and Transport Matteo Salvini said in mid-July.

«Brussels is going to approve the 21st package of the anti-Russian sanctions. What for, if previous 20 did not conceive that effect on which counted the European Union?  Russia not only did not fall on knees, it revives»,  Matteo Salvini told during the General Assembly of Association of the Italian entrepreneurs (GIM-Unimpresa) in Russia.

“Sanctions against the Russian Federation”, he added, «in general conceived boomerang effect, they struck with a boomerang the European economies. It is visible to the naked eye — life in the countries of the continent rises in price in all respects». Salvini considers also that the West talks about the termination of purchases of the Russian energy carriers are hypocritical.

«Europe will never be able to do without oil and gas from Russia. It confirms the fact that even now the countries of the continent continue buying them. It is still done by both France and Spain, and Greece, and the Netherlands and other states», he concluded.

Alfred Stern, CEO of the Austrian company OMV, agrees with Salvini, who is confident that the EU’s gas import policy reduces the pool of suppliers and poses threats to the energy security of the bloc. He noted that Europe, given the ban on gas imports from Russia and the declining volume of domestic production, is currently not in a position to allow itself to exclude sources of gas supplies based on their emission footprint. «We are significantly limiting where we can get gas from. You don’t have to be a Nobel laureate in economics to understand the consequences,» Stern added.

The trend on decrease in gas production in Europe, really takes place. In particular, in January — April on the British shelf of the North Sea 9.7 billion cubic meters of gas were extracted, decrease in yoy was 8.7%.

At the beginning of July the Agency on Cooperation of the European Power Regulators issued the report according to which supply of gas from Russia to the EU in 2026 will remain approximately at the level of 2025 despite the beginning of action of the ban on import of gas from Russia on pipelines and in the form of LNG under short-term contracts. The total amount of the Russian pipeline gas contracted by EU countries for 2026 is 16-26 billion cubic meters, LNG — 20-32 billion cubic meters. For the first five months of year, import of the Russian gas on pipelines grew by 7% of yoy, LNG — for 11 percent. Since March 18 when the first restrictions for import of the Russian gas began to work, until the end of May of supply of LNG grew by 17%, and gas on pipelines for 5 percent. The reasons for this were the inability to re-export Russian LNG to third countries, increased gas extraction under contracts before the introduction of new stages of the ban on imports from Russia, as well as the unfavorable market situation due to the closure of the Strait of Hormuz.

On July 7, the German Association of Gas Storage Operators issued a statement saying that Germany remains at risk of gas shortages in winter in the event of cold weather. The association called for creation of economic incentives for the accelerated pumping gas in storages. By the beginning of November, according to association, it «is still technically possible» to fill UGS of Germany for 76%. The carried-out modeling showed that in case of serious cold weather the deficiency of gas in February and March, 2027 can be about 851 million cubic meters per month, and the daily deficiency can be up to 189 million cubic meters.

German government understands that there is a problem. On July 8, the Ministry of Economics of Germany published the statement that formation of a strategic gas reserve will begin with summer of 2027. For minimization of negative impact on the market of purchase in a reserve will be stretched for two-three years. The formation of the reserve will be financed by a tax, which will previously amount to EUR 0.29–0.36 per MWh (3.5–4.4 dollars/thousand cubic meters). But these measures do not apply to the coming winter.

If the authorities of the European Union are unable to fix the situation with the filling of gas storage facilities, then they will only have to pray that the coming winter will be warm.
In turn China steadily increases purchases of Russian gas. Russia in the first half of 2026 delivered 3.593 million tons of liquefied natural gas to China that is 27.8% more than for the same period of 2025. In the near future, supplies via the Power of Siberia main gas pipeline will be increased from 38 to 44 billion cubic meters. At the beginning of next year, supplies via the Far Eastern route will begin and will gradually reach the level of 12 billion cubic meters of gas annually. In addition, instability in the LNG market is steadily pushing China to conclude the final contact for the implementation of the Power of Siberia-2 project.