Despite the sanctions, Europe is unable to completely wean itself off Russian oil and gas. European legislation must now put an end to this. Oil prices continue to fluctuate at relatively low levels due to expectations of a supply surplus and concerns about the economies of the two countries with the highest oil consumption.
Oil continues to trade at a low price. Last Wednesday, October 15th, the price was $61,91 per barrel. At the time of writing (Tuesday afternoon, October 21st), the price is $61,38 per barrel, slightly lower than last Wednesday, October 15th, when oil cost $61,91 per barrel. The closing price on Monday, October 20th, was $61,01, the lowest level since early May of this year.
An expected supply surplus is the biggest factor in current price levels. Last week, the International Energy Agency (IEA) reported that global oil supply increased by 5,6 million barrels per day in September compared to a year earlier. OPEC+ countries are responsible for 3,1 million of those barrels. The oil cartel began scaling back production cuts in April and is releasing more oil into the market each month. OPEC+ does not appear to plan to cut production again in the near future.
Besides supply, demand from the two largest oil-consuming countries, the US and China, is also important. China's economic growth slowed in the third quarter. The trade war between China and the US has flared up again this month, with Trump threatening China with 100% import tariffs effective November 1st. The countries are in talks, and a meeting between Trump and Xi is scheduled for the end of the month in South Korea.
Meanwhile, the ceasefire between Israel and Hamas is extremely fragile. Both sides accuse each other of being the first to violate the ceasefire, but they have also indicated their intention to re-affirm it. The US, Egypt, and Qatar, among others, are working to salvage the ceasefire.
The war between Russia and Ukraine is also preventing oil prices from falling further. The countries have successfully targeted each other's energy supplies. For example, a major Russian gas processing plant was forced to close due to Ukrainian drone attacks. Trump has announced a meeting with Putin in Hungary. Zelenskyy also wants to be there. A visit by the Ukrainian president to his American counterpart resulted in a tirade from the latter. Trump wants Ukraine to cede (part of) the Donbas to Russia. This makes a peace treaty seem far from being reached.
Diesel price
Diesel cost €122,95 per 100 liters (from 4.000 liters) on October 21st. A slight increase compared to last Wednesday.
gas price
Gas prices on the TTF futures market remain relatively low. At the time of writing, they are €32,07, while the price was more than €8 higher exactly a year ago.
Still 13% of gas imports into the EU come from Russia
European energy ministers approved a regulation on Monday that bans the import of Russian gas into the EU as of January 1, 2026. Existing long-term contracts may continue until January 1, 2028 at the latest. With this, the EU aims to definitively end its dependence on Russian energy. The Council must now further coordinate this with the European Parliament.
Russian oil is on the sanctions list and is therefore, in principle, already banned. Yet, Europe has not succeeded in completely abandoning Russian energy. Gas and oil imports from Russia to the EU have fallen significantly in recent years. Russia currently accounts for 3% of the EU's oil imports. However, the share for gas remains 13%, with an annual import value of over €15 billion. An import ban on oil is also in effect as of January 1, 2028.
According to various sources, a ban on Russian gas could have a price-raising effect in the short term. For example, the Oxford Institute for Energy Studies states in a report that a ban is unlikely to cause gas shortages, but spot and futures market prices will increase. The forecast is that TTF prices will rise by an average of around 27 cents per MMBtu from 2028 to 2035 (per MWh, this would be around 92 cents). Austria, Slovakia, and Hungary will face slightly higher price increases, averaging 35 cents per MMBtu, because alternatives are more limited there. Hungary is the most vulnerable, according to the institute. American LNG is the alternative to Russian gas that, according to the research institute, is likely to fill the largest gap. The Russian gas that is no longer supplied to Europe will likely find its way back to Asia.
Increased demand for gas due to cold
Temperatures are dropping, and this is reflected in the expected gas demand this week. According to the National Energy Dashboard's energy forecast, it's higher all week than the same day last week. Towards the end of the week, temperatures will drop and the wind will pick up, meaning heating will need to be used much more often than last week.
European gas reserves are almost at 83%, and Dutch reserves are at 72%, according to data from Gas Infrastructure Europe. This is still lower than a year ago, when 95% of European gas reserves were filled, and 91% in the Netherlands. The target of 74% by November 1st for the Netherlands seems achievable.
Electricity
The daily average on the Epex energy spot market varied over the past week from €121,26 per MWh on October 15 to €65 on October 21.
According to the National Energy Dashboard's energy forecast, more renewable energy is being generated this week than the average over the past three years. Wind energy is leading the way, with quite a few days experiencing wind force 4 and even 5.