Wood Mackenzie: The global LNG market faces disruption of 80 million tpy of Gulf supply, yet power prices in Europe held stable at €90/MWh
Published by Jessica Casey,
Editor
LNG Industry,
The Middle East conflict disrupted 80 million tpy of Gulf LNG exports, yet pow-er markets absorbed the shock through fuel diversification.
Month-ahead gas prices have so far peaked at just US$19/million Btu in April 2026, compared to nearly US$70/million Btu in September 2022. Wholesale power prices across Europe's five major markets averaged just over €90/MWh in March 2026, largely unchanged from March 2025 and well below the €280/MWh recorded during the first months of the Ukraine crisis.
Data released by Wood Mackenzie show the supply shock matched the scale of Russia's 2022 curtailment into Europe. Three factors have contained prices: warmer weather left European storage at 28% capacity at end-March, project start-ups added 40 million tpy of new LNG supply (on an annualised basis) since the beginning of 2026, and China's LNG demand plummeted as the country turned to alternatives.
Spain recorded the lowest wholesale power price at €42/MWh in March 2026, supported by renewables penetration exceeding 60%. Rising solar availability enabled Germany to cut coal and gas generation from 46% in February to 39% in March. Battery storage in Australia increased its share of price-setting from approximately 2% in early 2022 to 20% by late 2025, while gas-fired generation halved from 10% to under 5%.
“The Ukraine war illustrated for Europe the benefits of diversifying away from volatile fossil fuels,” said Peter Osbaldstone, Research Director, Europe Power at Wood Mackenzie. “Battery storage and renewables set prices with increasing frequency, reducing the influence of gas. That structural shift insulated power markets when this crisis hit.”
Key market developments
- Gas prices eased to US$15/million Btu in May 2026, only 20% above the 2025 average.
- Italian power prices rose 18%, Germany 5%, UK 3% y/y in March 2026.
- In France and Spain average market prices recorded declines of 16% and 22%, respectively.
- Japan's nuclear plants now constitute 10% of supply, double the 2022 level.
- Netherlands reduced coal and gas generation from 49% to 36% between February and March and Europe’s annual generation from gas has fallen nearly 13% since early 2022.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/29042026/wood-mackenzie-the-global-lng-market-faces-disruption-of-80-million-tpy-of-gulf-supply-yet-power-prices-in-europe-held-stable-at-90mwh/