7 reasons why Europe can deal with a gas shock better than in 2022 in Oil & Companies News 19/03/2026 Persian Gulf energy supply shock sparks flashbacks to 2022 Europe had just about shaken off memories of the 2022 energy crisis. Global energy markets were set to be well supplied through 2026, suggesting weaker energy prices this year. But this view has been upended by developments in the Middle East. While the supply impact from the disruption in Persian Gulf energy flows is significant, particularly if we are to see prolonged supply issues, we do not think this is a repeat of 2022 for Europe – the impact is expected to be lower. We do not believe European gas prices will trade to the peaks seen in 2022; global gas markets are relatively better supplied, while a large pipeline of LNG export capacity is coming onto the market in the years ahead. That said, clearly, how high prices go will ultimately depend on how long supply disruptions in the Middle East persist. Expectations that gas prices will not reach the elevated levels of 2022 also suggest that electricity prices will be more contained. In addition, Europe is relatively less exposed to the gas market, with the region having reduced its reliance. EU gas demand is 16% below pre-Russia-Ukraine war levels. Furthermore, the EU would have learnt invaluable lessons from the 2022 energy crisis, which leaves it better prepared to navigate any future supply shocks. Here are seven reasons why we believe things are different this time for Europe. The current energy shock should be temporary, 2022 was more structural for Europe The amount of LNG disrupted by developments in the Persian Gulf is significant. Between Qatar and the UAE, roughly 110bcm of annual supply is currently affected, which is 20% of global LNG trade. The volumes are significant but still less than the 144bcm of Russian pipeline gas, which was at risk heading into 2022. However, the key difference is that current supply disruptions are temporary. Yes, there is plenty of uncertainty about the duration of the disruption, but ultimately, supply will return. This is different from 2022, when the market was of the view that we were set to see a more structural shift in gas supply to Europe. Essentially, the market had the view that a loss in Russian gas supply would be final, with a very low probability that flows would ever resume. Europe faced a perfect storm in 2022 In 2022, it seemed that almost everything that could go wrong for Europe did. Not only was the region dealing with reduced gas flows from Russia, there was also uncertainty over further losses. But other sources of electricity generation also struggled. The largest nuclear power producer in the EU, France, saw significant maintenance work carried out through much of the year due to corrosion issues, resulting in annual nuclear output falling to its lowest level since 1988 and 30% below the annual average over the last 20 years. Similarly, Europe was also having to deal with lower-than-usual hydro power output. Lower nuclear and hydro meant the power sector had to lean more heavily on fossil fuels, including natural gas, for generation needs, at a time of significant supply uncertainty. Installed renewables capacity in the EU has grown significantly Renewables’ capacity in the EU has also grown strongly since the end of 2021. Bloomberg New Energy Finance numbers show that installed capacity for solar and wind has surged by 57% between 2021 and 2024. Estimates sugg