The Russian invasion of Ukraine in 2022 triggered an unprecedented energy crisis across Europe, with direct consequences for household budgets.
The continent’s dependency on Russian gas, which was used for heating, electricity production, and industrial processes, made it vulnerable to geopolitical fluctuations and decisions made by the Kremlin.
The conflict led to a drastic reduction in Russian gas supplies to Europe, with key pipelines like Nord Stream 1 shutting down in September 2022. This disruption created a severe shortage of gas on the European market, sending prices skyrocketing to record levels.
To compensate for the lack of Russian gas, Europe turned to the United States, which became the main supplier of liquefied natural gas (LNG). LNG is transported by ship and regasified at European terminals. Although this diversification ensured supply security, American LNG comes at a significantly higher cost than Russian gas.
The surge in gas prices had a direct effect on European consumers, who saw their electricity and gas bills soar. In many countries, governments introduced support measures to help families cope with rising energy costs, such as subsidies and price caps.
The energy crisis has accelerated the transition toward renewable energy sources in Europe, with increased investments in solar, wind, and hydrogen power. However, dependence on American LNG could persist in the short to medium term, keeping gas prices at elevated levels.
Europe faces several challenges in securing energy security and environmental sustainability. Continued diversification of supply sources will be necessary, as well as investment in LNG infrastructure and an accelerated shift toward renewable energy. Additionally, promoting energy efficiency and reducing consumption will be crucial to mitigate the impact of high prices on consumers.