Natural gas: Cycles

The 2022 shock that sent European gas soaring

European gas (World Bank series) averaged $25.42 per million Btu in September 2026, against $11.12 a year earlier and $22.84 five years earlier. The ten-year range runs from $1.58 to $70.04, the peak coming during the 2022 crisis after Russia cut pipeline supply. In real 2010 dollars the annual average jumped from $3.31 in 2020 to $34.35 in 2022. Gas spikes because storage is limited, demand is weather-driven and new LNG plants take years to build. Regional gaps are large: in 2024 US Henry Hub averaged $2.25 against $10.89 at the Dutch TTF (Energy Institute).

Natural gas, Europe price

Chart: Natural gas, Europe monthly price

Chart: Natural gas, Europe annual real price

Super-cycles in natural gas

Gas prices move in regional cycles rather than one world cycle, because transport is costly. US prices rose through the 2000s, then the shale revolution held them near $2-4/mmbtu for 15 years. Asian LNG was long tied to oil and moved with it. Europe swung from oil-linked contracts to hub pricing and then to the 2021-2022 crisis, when Russian pipeline cuts sent prices to records. LNG plant build-outs come in waves (Australia 2015-2019, US from 2016, Qatar from 2026), and each wave tends to end a price spike a few years later. The 2026 shutdown of Qatari LNG showed how concentrated the market still is.

1. 2000-2008

   Conventional US output stagnated while gas-fired power grew; hurricanes in 2005 knocked out Gulf of Mexico supply. The US planned LNG import terminals.

   Henry Hub rose from $2.27/mmbtu (1999) to $8.92 (2005) and $8.86 (2008) annual averages (World Bank).

2. 2009-2016

   Shale gas flooded the US market, crushing Henry Hub. Asia paid oil-linked prices, and after Fukushima in 2011 Japan's LNG demand jumped. Then Australian LNG and the 2014 oil crash brought Asian prices down.

   Henry Hub fell to $2.75 (2012); Japan LNG rose to $16.55 (2012) and fell to $7.37 (2016) (World Bank).

3. 2021-2022

   Post-COVID demand, low storage and then Russia's cut of pipeline gas to Europe after invading Ukraine triggered Europe's worst gas crisis. Europe outbid Asia for LNG.

   European gas rose from $3.24 (2020) to $40.34 (2022) annual average, with a $70.0 monthly average in August 2022; Platts JKM averaged $34.0 in 2022 (World Bank; Energy Institute).

4. 2026

   Attacks shut Qatar's Ras Laffan LNG complex from early March 2026 and Hormuz closed to most shipping. QatarEnergy's force majeure ran to mid-October; Europe and Asia scrambled for US and other cargoes.

   European gas rose from $11.2 (February 2026) to $25.4/mmbtu (September 2026) monthly averages (World Bank); Rabobank expected JKM at $17-18.50 for late 2026.

What drives the cycle

• LNG capacity waves. New liquefaction plants come in clusters after final investment decisions, flooding the market a few years later; a large US and Qatari wave was due from 2026.
• Weather and storage. Cold winters and hot summers swing heating and power demand; low storage before winter amplifies spikes.
• Oil indexation. Many Asian and some Indian LNG contracts are priced as a slope of Brent, so oil cycles feed into gas.
• Pipeline geopolitics. Russian supply to Europe went from about 40% of EU imports before 2022 to a small share, reshaping world LNG flows.
• Coal-gas switching in Asia. China and India burn more coal when LNG is dear, capping LNG demand at high prices.

Metrics to track