Expert analysis
The European energy market is gradually moving out of the short-term shock phase and increasingly starting to price in a potentially prolonged LNG supply disruption. Volatility remains high, and market movements are primarily driven by geopolitical developments and supply outlooks.
The key question at this stage is: are we facing a temporary disruption, or a longer-term structural issue?
Gas Market (TTF): Upward Risks Remain Dominant
The gas market continues to be in focus. The most critical factor is the situation at Ras Laffan Industrial City, where the market is trying to assess whether the disruption will be prolonged or followed by a relatively quick recovery.
At the same time, developments around the Strait of Hormuz are also receiving significant attention. Any new incident could trigger an immediate and sharp price reaction.
Asian demand remains another key driver. If demand weakens, more LNG cargoes could be redirected to Europe, easing prices. However, if Asia returns aggressively to the market, it could tighten European supply further.
Storage levels and Norwegian gas flows are also influencing the outlook, while risks related to the injection season have already started to be priced in. In the short term, milder weather may help ease pressure on prices.
Carbon Market (EUA): Stabilization with Moderate Upside
The carbon market shows a more stable picture, supported by strong political backing for the EU Emissions Trading System.
At the same time, allowance sales represent a supply-side risk. However, with investor positioning still relatively low, there is room for moderate upside.
Power Market: Still Driven by Gas
Electricity prices continue to be primarily driven by natural gas and EUA price movements. Renewable generation—particularly solar and hydro—can provide short-term relief on prices.
At the same time, increasing Ukrainian import demand and ongoing geopolitical uncertainty represent upward risks.
High volatility and strong gas dependency are expected to persist.
What is the Market Watching This Week?
Several key factors could shape market direction in the coming days:
- The extent of the disruption and recovery timeline at Ras Laffan Industrial City
- Escalation or de-escalation of the Middle East conflict
- EU ETS decisions and allowance sales
- LNG flows (Europe vs Asia competition)
- Weather conditions and European storage levels
Overall Picture: A Market at a Turning Point
A short-term correction in gas prices is possible, but upward risks remain dominant. The carbon market appears stable with a slightly positive outlook, while power prices continue to closely follow gas market movements.
The defining question is whether the market will begin to treat the current situation as a prolonged LNG supply disruption. This shift in perception could play a decisive role in the next major move across energy markets.
Source: Greenergy Market
Analysis written by: Tóth Eszter Lilla
23.03.2026.