Monthly natural gas prices in the United States and Europe 2014-2024

The average monthly price for natural gas in the United States fell to 1.5 nominal U.S. dollars per million British thermal units (Btu) in March 2024. By contrast, natural gas prices in Europe were about five times higher than those of the U.S. Prices across the European continent tend to be notably higher than those in the U.S. as the latter benefits from being a major hydrocarbon producer.

Russian import dependence results in surging natural gas prices across Europe

European prices for natural gas rose most notable throughout the second half of 2021 and much of 2022, peaking at over 70 U.S. dollars per million Btu in August 2022. The sharp rise was due to supply chain issues and economic strain following the COVID-19 pandemic, which was further exacerbated by Russia’s invasion of Ukraine in early 2022. Many European countries relied heavily on gas imports from their neighbor, with Russian gas dependence highest in Eastern Europe. As a result of the war, many countries began looking for alternative sources, and Russian pipeline gas imports to the European Union declined as a result.

How domestic natural gas production shapes prices

As intimated, the United States’ position among the leaders of worldwide natural gas production is one of the main reasons for why prices for this commodity are so low across the country. In 2022, the U.S. produced nearly one trillion cubic meters of natural gas, which allays domestic demand and allows for far lower purchasing prices.