The European Energy Crisis 2021-2023
The natural experiment that taught a generation of investors how regional gas markets actually work
On August 26, 2022, the front-month TTF natural gas contract on ICE Endex reached an intraday peak of approximately €343 per megawatt-hour, with the daily settlement near €314/MWh per European Commission analysis of the period. Two days earlier, the Henry Hub spot price had peaked at $9.85 per MMBtu per EIA's daily series — its highest reading since 2008.
At then-prevailing exchange rates, the TTF intraday peak corresponded to roughly $100 per MMBtu equivalent, while Henry Hub's $9.85/MMBtu was less than a tenth of the European level. The same physical commodity (methane), priced more than 10x apart on the same trading day.
The European spike was the apex of a multi-year crisis that began with weather-driven supply tightness in summer 2021, intensified through the fall as Russia kept European storage levels low against historical norms, accelerated catastrophically after Russia's invasion of Ukraine on February 24, 2022, and resolved gradually through 2023-2024 via a combination of demand destruction, supply substitution, mild winter weather, and structural policy responses.
That is the opening. Finishing a lesson is where it stops being interesting and starts being useful: the full lesson runs to 7 sections and ends with 6 practice questions. A free account is what opens the rest, and the other 255 lessons in the Academy with it. No card.
What this lesson covers
- 1Phase 1: Summer 2021 to February 2022 — pre-invasion tightening
- 2Phase 3: September 2022 — the Nord Stream sabotage and the structural break
- 3Quantifying the supply-substitution gap and demand destruction response
- 4European energy crisis — chronology of major events and price responses
- 5Late 2022-2024 — the gradual normalization and the new European energy baseline
- 6Where to see this on the platform
- 7Summary