Middle East Conflict Fuels European Power Price Volatility in 2026

European Power Prices

Middle East conflict fuels 2026 power price volatility

Gas supply disruption removes 19% of global LNG exports

Europe's reduced coal capacity locks in gas-power price

Stock video by Kaffeesüchtig via Pixabay

Mar 17, 2026

Middle East Conflict Fuels European Power Price Volatility in 2026

According to analysis from Wood Mackenzie, a disruption to gas supply stemming from conflict in the Middle East is expected to cause sustained volatility in European power markets. The disruption is removing approximately 1.5 Mt per week from global LNG markets, an amount equivalent to 19% of global exports.

TTF day-ahead gas prices soared above EUR55/MWh on 9 March following a force majeure declaration the previous week. Current gas storage levels on the continent are 10% below those seen at the same time last year. Europe's capacity to switch from gas to coal for power generation has diminished considerably since 2022. A 77% increase in gas prices now leads to only a 5% reduction in gas-based generation, locking in a connection between gas and power prices.

Between 2022 and 2025, Europe added 306 TWh of low-carbon power supply, which reduced dependence on fossil fuels. However, gas generators frequently set the marginal price in major power markets, meaning increases in gas costs directly lead to higher electricity prices. The loss of alternative supplies, like coal capacity, means the region remains vulnerable to gas price shocks.

The probability of government policy intervention is rising. European governments spent EUR60 billion on crisis-related electricity subsidies in both 2022 and 2023, and Germany has introduced industrial energy cost support covering 2026-2028. Past interventions included various revenue caps and a mechanism that limited gas generator bids in Spain and Portugal. Potential interventions in the current situation could mirror these precedents, including caps, taxes, subsidies, or temporary market rule changes.

Energy Security Returns as Policy Priority

A prolonged supply disruption is strengthening the strategic argument for investments in renewables, nuclear power, grid expansion, and storage to reduce import dependence. Nuclear policy shifted in 2025 in several European nations, with new state support for construction, the lifting of a moratorium, and reconsideration of plant extensions. The European Union's legal commitment to a 90% emissions reduction by 2040 remains, though the path to achieving it is becoming more complex.

The market outlook depends heavily on the duration of the conflict and whether any export infrastructure sustains damage. Assuming no damage, a restart of supply could take approximately two weeks. Construction on major new LNG projects will likely be paused for the conflict's duration, which may affect longer-term supply.

Prior to the conflict, the global gas market appeared balanced, with more than 35 Mt of new LNG supply expected in 2026. However, Asian LNG prices for April 2026 delivery have climbed as buyers seek alternatives, and they are expected to trade at a premium to Atlantic basin prices.

1. INTRODUCTION

Making Data-Driven Decisions to Grow Your Business
1. REPORT DESCRIPTION
2. RESEARCH METHODOLOGY AND THE AI PLATFORM
3. DATA-DRIVEN DECISIONS FOR YOUR BUSINESS
4. GLOSSARY AND SPECIFIC TERMS
2. EXECUTIVE SUMMARY

A Quick Overview of Market Performance
1. KEY FINDINGS
2. MARKET TRENDS This Chapter is Available Only for the Professional EditionPRO
3. MARKET OVERVIEW

Understanding the Current State of The Market and its Prospects
1. MARKET SIZE: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
2. CONSUMPTION BY COUNTRY: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
3. MARKET FORECAST TO 2035
4. MOST PROMISING PRODUCTS FOR DIVERSIFICATION

Finding New Products to Diversify Your Business
- This Chapter is Available Only for the Professional EditionPRO
1. TOP PRODUCTS TO DIVERSIFY YOUR BUSINESS
2. BEST-SELLING PRODUCTS
3. MOST CONSUMED PRODUCTS
4. MOST TRADED PRODUCTS
5. MOST PROFITABLE PRODUCTS FOR EXPORT
5. MOST PROMISING SUPPLYING COUNTRIES

Choosing the Best Countries to Establish Your Sustainable Supply Chain
- This Chapter is Available Only for the Professional EditionPRO
1. TOP COUNTRIES TO SOURCE YOUR PRODUCT
2. TOP PRODUCING COUNTRIES
3. TOP EXPORTING COUNTRIES
4. LOW-COST EXPORTING COUNTRIES
6. MOST PROMISING OVERSEAS MARKETS

Choosing the Best Countries to Boost Your Export
- This Chapter is Available Only for the Professional EditionPRO
1. TOP OVERSEAS MARKETS FOR EXPORTING YOUR PRODUCT
2. TOP CONSUMING MARKETS
3. UNSATURATED MARKETS
4. TOP IMPORTING MARKETS
5. MOST PROFITABLE MARKETS
7. PRODUCTION

The Latest Trends and Insights into The Industry
1. PRODUCTION VOLUME AND VALUE: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
2. PRODUCTION BY COUNTRY: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
8. IMPORTS

The Largest Import Supplying Countries
1. IMPORTS: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
2. IMPORTS BY COUNTRY: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
3. IMPORT PRICES BY COUNTRY: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
9. EXPORTS

The Largest Destinations for Exports
1. EXPORTS: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
2. EXPORTS BY COUNTRY: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
3. EXPORT PRICES BY COUNTRY: HISTORICAL DATA (2012–2025) AND FORECAST (2026–2035)
10. PROFILES OF MAJOR PRODUCERS

The Largest Producers on The Market and Their Profiles
- This Chapter is Available Only for the Professional EditionPRO
11. COUNTRY PROFILES

The Largest Markets And Their Profiles
This Chapter is Available Only for the Professional Edition PRO
1. 11.1
  Albania
  - Market Size
  - Production
  - Imports
  - Exports
2. 11.2
  Andorra
  - Market Size
  - Production
  - Imports
  - Exports
3. 11.3
  Austria
  - Market Size
  - Production
  - Imports
  - Exports
4. 11.4
  Belarus
  - Market Size
  - Production
  - Imports
  - Exports
5. 11.5
  Belgium
  - Market Size
  - Production
  - Imports
  - Exports
6. 11.6
  Bosnia and Herzegovina
  - Market Size
  - Production
  - Imports
  - Exports
7. 11.7
  Bulgaria
  - Market Size
  - Production
  - Imports
  - Exports
8. 11.8
  Croatia
  - Market Size
  - Production
  - Imports
  - Exports
9. 11.9
  Czech Republic
  - Market Size
  - Production
  - Imports
  - Exports
10. 11.10
  Denmark
  - Market Size
  - Production
  - Imports
  - Exports
11. 11.11
  Estonia
  - Market Size
  - Production
  - Imports
  - Exports
12. 11.12
  Faroe Islands
  - Market Size
  - Production
  - Imports
  - Exports
13. 11.13
  Finland
  - Market Size
  - Production
  - Imports
  - Exports
14. 11.14
  France
  - Market Size
  - Production
  - Imports
  - Exports
15. 11.15
  Germany
  - Market Size
  - Production
  - Imports
  - Exports
16. 11.16
  Gibraltar
  - Market Size
  - Production
  - Imports
  - Exports
17. 11.17
  Greece
  - Market Size
  - Production
  - Imports
  - Exports
18. 11.18
  Holy See
  - Market Size
  - Production
  - Imports
  - Exports
19. 11.19
  Hungary
  - Market Size
  - Production
  - Imports
  - Exports
20. 11.20
  Iceland
  - Market Size
  - Production
  - Imports
  - Exports
21. 11.21
  Ireland
  - Market Size
  - Production
  - Imports
  - Exports
22. 11.22
  Italy
  - Market Size
  - Production
  - Imports
  - Exports
23. 11.23
  Latvia
  - Market Size
  - Production
  - Imports
  - Exports
24. 11.24
  Lithuania
  - Market Size
  - Production
  - Imports
  - Exports
25. 11.25
  Luxembourg
  - Market Size
  - Production
  - Imports
  - Exports
26. 11.26
  North Macedonia
  - Market Size
  - Production
  - Imports
  - Exports
27. 11.27
  Malta
  - Market Size
  - Production
  - Imports
  - Exports
28. 11.28
  Moldova
  - Market Size
  - Production
  - Imports
  - Exports
29. 11.29
  Montenegro
  - Market Size
  - Production
  - Imports
  - Exports
30. 11.30
  Netherlands
  - Market Size
  - Production
  - Imports
  - Exports
31. 11.31
  Norway
  - Market Size
  - Production
  - Imports
  - Exports
32. 11.32
  Poland
  - Market Size
  - Production
  - Imports
  - Exports
33. 11.33
  Portugal
  - Market Size
  - Production
  - Imports
  - Exports
34. 11.34
  Romania
  - Market Size
  - Production
  - Imports
  - Exports
35. 11.35
  Russia
  - Market Size
  - Production
  - Imports
  - Exports
36. 11.36
  San Marino
  - Market Size
  - Production
  - Imports
  - Exports
37. 11.37
  Serbia
  - Market Size
  - Production
  - Imports
  - Exports
38. 11.38
  Slovakia
  - Market Size
  - Production
  - Imports
  - Exports
39. 11.39
  Slovenia
  - Market Size
  - Production
  - Imports
  - Exports
40. 11.40
  Spain
  - Market Size
  - Production
  - Imports
  - Exports
41. 11.41
  Sweden
  - Market Size
  - Production
  - Imports
  - Exports
42. 11.42
  Switzerland
  - Market Size
  - Production
  - Imports
  - Exports
43. 11.43
  Ukraine
  - Market Size
  - Production
  - Imports
  - Exports
44. 11.44
  United Kingdom
  - Market Size
  - Production
  - Imports
  - Exports
45. 11.45
  Liechtenstein
  - Market Size
  - Production
  - Imports
  - Exports
46. 11.46
  Isle of Man
  - Market Size
  - Production
  - Imports
  - Exports
47. 11.47
  Monaco
  - Market Size
  - Production
  - Imports
  - Exports
LIST OF TABLES
1. Key Findings In 2025
2. Market Volume, In Physical Terms: Historical Data (2012–2025) and Forecast (2026–2035)
3. Market Value: Historical Data (2012–2025) and Forecast (2026–2035)
4. Per Capita Consumption, by Country, 2022–2025
5. Production, In Physical Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
6. Imports, In Physical Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
7. Imports, In Value Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
8. Import Prices, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
9. Exports, In Physical Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
10. Exports, In Value Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
11. Export Prices, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
LIST OF FIGURES
1. Market Volume, In Physical Terms: Historical Data (2012–2025) and Forecast (2026–2035)
2. Market Value: Historical Data (2012–2025) and Forecast (2026–2035)
3. Consumption, by Country, 2025
4. Market Volume Forecast to 2035
5. Market Value Forecast to 2035
6. Market Size and Growth, By Product
7. Average Per Capita Consumption, By Product
8. Exports and Growth, By Product
9. Export Prices and Growth, By Product
10. Production Volume and Growth
11. Exports and Growth
12. Export Prices and Growth
13. Market Size and Growth
14. Per Capita Consumption
15. Imports and Growth
16. Import Prices
17. Production, In Physical Terms: Historical Data (2012–2025) and Forecast (2026–2035)
18. Production, In Value Terms: Historical Data (2012–2025) and Forecast (2026–2035)
19. Production, by Country, 2025
20. Production, In Physical Terms, by Country: Historical Data (2012–2025) and Forecast (2026–2035)
21. Imports, In Physical Terms: Historical Data (2012–2025) and Forecast (2026–2035)
22. Imports, In Value Terms: Historical Data (2012–2025) and Forecast (2026–2035)
23. Imports, In Physical Terms, By Country, 2025
24. Imports, In Physical Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
25. Imports, In Value Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
26. Import Prices, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
27. Exports, In Physical Terms: Historical Data (2012–2025) and Forecast (2026–2035)
28. Exports, In Value Terms: Historical Data (2012–2025) and Forecast (2026–2035)
29. Exports, In Physical Terms, By Country, 2025
30. Exports, In Physical Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
31. Exports, In Value Terms, By Country: Historical Data (2012–2025) and Forecast (2026–2035)
32. Export Prices, By Country: Historical Data (2012–2025) and Forecast (2026–2035)

Recommended posts

Gulf Energy Strikes Disrupt Global LNG Supply, Raising Prices

Australia Evaluates Windfall Tax on Energy Sector Amid High LNG Prices

Ras Laffan Attacks to Prolong Global LNG Supply Disruption

European Natural Gas Futures Retreat from Recent High