The average monthly price for natural gas in the United States amounted to 3.02 nominal U.S. dollars per million British thermal units (Btu) in December 2024. By contrast, natural gas prices in Europe were about four times higher than those in the U.S. Prices for Europe tend to be notably higher than those in the U.S. as the latter benefits from being a major hydrocarbon producer. Europe's import reliance European prices for natural gas rose most notable throughout the second half of 2021 and much of 2022, peaking at over 70 U.S. dollars per million Btu in August 2022. The sharp rise was due to supply chain issues and economic strain following the COVID-19 pandemic, which was further exacerbated by Russia’s invasion of Ukraine in early 2022. As a result of the war, many countries began looking for alternative sources, and Russian pipeline gas imports to the European Union declined as a result. Meanwhile, LNG was a great beneficiary, with LNG demand in Europe rising by more than 60 percent between 2021 and 2023. How domestic natural gas production shapes prices As intimated, the United States’ position among the leaders of worldwide natural gas production is one of the main reasons for why prices for this commodity are so low across the country. In 2023, the U.S. produced more than one trillion cubic meters of natural gas, which allays domestic demand and allows for far lower purchasing prices.

German industrial consumers have seen a reduction in the price of natural gas since 2010. Prices fell from 3.82 cents per kilowatt hour (kWh) in 2010, to 3.19 euro cents per kilowatt hour in 2021, for users with an annual consumption greater than 10,000 gigajoules (GJ) and lower than 100,000 GJ.Natural gas in GermanyNatural gas plays a significant role in the German energy mix. As of 2019, the country generated 14.9 percent of their energy using natural gas as the primary fuel source. In that same year, a total of 90.5 terawatt hours of electricity was generated using natural gas.However, domestic natural gas production has been reduced considerably in Germany over the past decade. In 2008, Germany's natural gas production stood at 13.6 billion cubic meters, a volume that would eventually sink to 5.3 billion cubic meters by 2019. Natural gas price for householdsHowever, while prices for the industry have been declining, German households have continuously had to dig deeper into their pockets in oder to pay their gas bill. Residential gas prices in Europe were around double the price for industrial clients. German households with an annual consumption below 200 GJ paid 6.1 euro cents per kilowatt hour. Dutch households paid the most.

TTF Gas decreased 8.92 EUR/MWh or 17.69% since the beginning of 2025, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. EU Natural Gas TTF - values, historical data, forecasts and news - updated on March of 2025.

In 2023, the price of natural gas in Europe reached 13.1 constant U.S. dollars per million British thermal units, compared with 2.5 U.S. dollars in the U.S. This was a notable decrease compared to the previous year, which had seen a steep increase in prices due to an energy supply shortage exacerbated by the Russia-Ukraine war. Since 1980, natural gas prices have typically been higher in Europe than in the United States and are expected to remain so for the coming two years. This is due to the U.S. being a significantly larger natural gas producer than Europe.

What is natural gas and why is it gaining ground in the energy market? Natural gas is commonly burned in power plants with combustion turbines that generate electricity or used as a heating fuel. Given the fact that the world’s energy demand continues to grow, natural gas was seen by some industry leaders as an acceptable "bridge-fuel" to overcome the use of more emission-intensive energy sources such as coal. Subsequently, natural gas has become the main fuel for electricity generation in the U.S., while the global gas power generation share has reached 22 percent.

How domestic production shapes U.S. natural gas prices The combination of hydraulic fracturing (“fracking”) and horizontal drilling can be regarded as one of the oil and gas industry’s biggest breakthroughs in decades, with the U.S. being the largest beneficiary. This technology has helped the industry release unprecedented quantities of gas from deposits, mainly shale and tar sands that were previously thought either inaccessible or uneconomic. It is forecast that U.S. shale gas production could reach 35 trillion cubic feet in 2050, up from 1.77 trillion cubic feet in 2000.

European countries have some of the highest natural gas prices for households worldwide. Natural gas prices for households vary greatly around the world, depending on governmental levies, taxes, as well as local production. In Sweden, prices averaged 0.24 U.S. dollars per kilowatt-hour in December 2023, whilst prices in Canada, a producer of natural gas, were just 0.04 U.S. dollars per kilowatt-hour.

Between 2005 and 2014, Germany saw a gradual reduction in its natural gas consumption, with levels falling to 73.9 billion cubic meters. Over the following years, the country’s consumption experienced a mostly increasing trend, reaching 75.7 billion cubic meters in 2023. In comparison, domestic production has been in annual decline since 2003. Demand is expected to increase in the future because of a move away from coal and nuclear power. These energy sources made up around 40 percent of Germany’s energy mix in 2021. Dependence on energy imports Due to increased demand and falling production, Germany is heavily reliant on energy imports, with its dependency rate increasing to 63.6 percent in 2018. In 2021, Germany imported 102 billion cubic meters of natural gas, by far the highest rate throughout Europe. Imports are expected to increase further as coal and nuclear power is phased out. Nord Stream 2 gas pipeline In 2018, Germany granted permission for the construction of a 746-mile gas pipeline expansion to the Nord Stream pipeline. It will connect Russia with Germany through the Baltic sea and will have a capacity of 55 billion cubic meters of natural gas a year. This plan has not been without controversies, however. There are fears it will increase German reliance on Russian energy. Ukraine, which the pipeline bypasses, filed a lawsuit against its construction, and 10 European countries officially stated that the project was not in the EU’s best interests. Nonetheless, as of July 2021, U.S. and Germany's representatives agreed on the completion of Nord Stream 2.

Japan and China have some of the highest spot prices for liquefied natural gas. In January 2024, customers in Japan and China paid approximately 10.05 U.S. dollars per million British thermal unit of LNG delivered. Destination markets in Europe and South America experienced slightly lower shipping costs. In the last few years, the global trade volume of LNG has increased notably, exceeding 500 billion cubic meters shipped.

LNG demand growth and largest destination markets

Increased gas demand and improved liquefaction technology has prompted growth in the gas market and the entry of new players. LNG prices were initially strongly influenced by crude oil, however, as the market grew it developed independent benchmarks. As one of the largest LNG importing countries, the price for LNG in Japan has become synonymous with the global benchmark.

Russia accounted for 18 percent of the value of natural gas imports into the European Union (EU) from non-EU countries in the second quarter of 2024. The share was higher than in the corresponding period of the previous year, but significantly lower than in 2021. The decrease was due to the Western sanctions on Russia over its invasion of Ukraine and the reduction of gas supplies by Gazprom to Europe. Which EU countries import gas from Russia? In 2023, the EU imported 27 billion cubic meters of natural gas via pipelines from Russia, compared to 140 billion cubic meters in 2021. Among the EU countries, Germany was by far the largest importer of natural gas from Russia. Central and Eastern European (CEE) countries such as Poland, Czechia, and Hungary also ranked in the top 10 before the war in Ukraine given their high dependence on Russian gas. After the onset of the war in 2022, Turkey and China emerged as some of the largest buyers of Russian pipeline gas. The future of natural gas in a climate-neutral Europe Gas continues to be the second-most important primary energy source in the EU, after petroleum-based products. However, to stay within the Paris Agreement’s target of 1.5 degrees Celsius, the EU is actively looking for ways to accelerate the transition to more renewable sources of energy, including the adoption of the European Green Deal and the Commission’s "Fit for 55" proposal and RePowerEU plan. Under these sustainable scenarios, the European gas demand is estimated to fall from 617 billion cubic meters in 2018 to 380 billion cubic meters in 2040.

Russia produced over 586 billion cubic meters of natural gas in 2023, having decreased the volume by approximately five percent compared to the previous year. It ranked as the second-largest producer of this fossil fuel worldwide. How has COVID-19 affected the Russian natural gas production? The global coronavirus (COVID-19) pandemic led to a decline in the U.S. natural gas prices and a higher demand for liquified natural gas (LNG), which meant increased competition for Russian energy producers. Furthermore, European countries were forecast to see a decrease in natural gas demand due to the lockdown. Russia's major company in the industry, Gazprom decreased its export volume to non-CIS countries in Europe to 175 billion cubic meters in 2020. How much natural gas does Russia export? Russia exported around 125 billion cubic meters of natural gas via pipelines in 2022. The export volume of liquefied natural gas (LNG) in the country reached 40 billion cubic meters in the same year. The major export destination of the Russian natural gas was China, which was followed by Turkey and Germany.