Anastasia Levchenko, Researcher at the Gaidar Institute’s Industrial Organization and Infrastructure Economics Department, explained in a commentary for “Vzglyad” why gas prices in Europe remain high despite news of a ceasefire, and what consequences the energy crisis could have for the region’s economy.
According to the economist, since the beginning of 2026, the European TTF gas benchmark has risen by approximately 120%—from about $29 to $64–69 per MWh. Prices have not yet returned to pre-crisis levels: markets continue to reflect the risks of disruptions to LNG supplies, competition between Europe and Asia, and low gas storage levels.
“The main reason for the persistently high prices is the ongoing uncertainty in the markets. The truce has not evolved into a permanent agreement or clear guarantees of supply security, so a significant risk premium remains,” noted Anastasia Levchenko.
Weather conditions are creating additional pressure. Unusually hot weather has increased demand for electricity, while drought has reduced output from hydroelectric and nuclear power plants. As a result, European countries are having to rely more heavily on gas-fired power plants while simultaneously needing to replenish storage facilities ahead of winter.
Anastasia Levchenko believes that the energy shock could fuel inflation and increase the risk of stagflation in Europe. High gas prices are already affecting production costs, and a possible increase in ECB interest rates will make loans more expensive and could lead to a decline in investment and production in energy-intensive industries.
“At the same time, the weather will be the main factor in the coming months. If the winter is mild, there’s nothing to worry about. But if it’s cold, cloudy, and windless, problems will arise,” the expert emphasized.