The big turnaround: how Europe's gas prices fell from €300 to €35 MWh in the span of a year

The numbers seemed to be in the grip of an irrepressible force: August 2022 began with the Title Transfer Facility (TTF), Europe's leading hub, trading gas at €145 per megawatt-hour (MWh), an alarming level.

Two weeks later, the TTF broke through the €200 MWh barrier for the first time ever. By 26 August, the TTF did the unthinkable: it reached €300 MWh. 

Suddenly, the prospect of the European citizens, accustomed to decades of prosperity, being subject to rationing and blackouts went from far-fetched to plausible. 

"Gas prices have broken a new record. How high can they go?" read the top line of a Euronews article published that very week.

The headline, while dramatic, encapsulated the atmosphere of uncertainty and anxiety –  a polite euphemism for hysteria – that characterised the worst times of the energy crunch, an unheard-of phenomenon unleashed by the COVID-19 pandemic and exacerbated by Vladimir Putin's decision to launch a war against Ukraine.

Back then, no one could convincingly answer the "how high" question.  But today, a year later and with the benefit of hindsight, we can: after hitting the €300 MWh ceiling, Europe's gas prices began a steady decline and fell back to double-digit territory.

Last Friday, the TTF closed trading at almost €35 MWh – an 88% decrease compared to the all-time peak achieved in August 2022. This brings the continent closer to the traditional patterns seen before the pandemic when prices, sustained by Russia's abundant and cheap deliveries, used to reliably range between €15 and €25 MWh.

The drastic turnaround represents one of Europe's greatest feats since the Kremlin ordered its troops to cross into Ukrainian territory and irreversibly transformed the long-established structure of global