For the past two years, winter in Greece and the rest of Europe began with high concerns and uncertainty regarding the availability of energy supply and the overall cost of energy for European households, businesses, and public finance. This winter, however, started without any particular problems regarding both energy supply and energy prices and, unless any new, unpredictable event occurs, it seems that things will continue smoothly for the coming months. This realization is perceived by many analysts as a rather strange development, since the last two months have had a fair dose of uncertainty, both regarding the wider international political field and in relation to the energy sector in particular.

Moderate prices despite two wars

With the war in Ukraine continuing relentlessly, the dramatic events in Israel and the Gaza Strip have since the beginning of October added a second war in the eastern flank of the European Union. For the first time in its history as a supranational entity, the EU has been called upon to manage the impacts of two wars close to its borders.

Alongside these two, armed, conflicts, we have recently had (a) fears of the flow of Russian gas into South-East Europe being stopped in retaliation for the tariffs Bulgaria imposed on Gazprom, (b) the blowing up of the Balticconnector gas pipeline connecting Finland to Estonia, which mostly conveys LNG from the US, and (c) OPEC+ continuing to threaten further oil production cuts.

However, natural gas prices in Europe are nearing their lowest levels in six months and remain 70% lower than their December 2022 levels, while oil remains well below $80 per barrel, also lower than last year’s levels.

High interest rates and low demand are keeping prices low

Prices remain relatively low because despite concerns about reductions in energy supply, there is stronger evidence that energy demand is – and will remain – much lower for a long time to come.

As long as major central bank interest rates remain at such high levels, global economic activity is stalling, while the Chinese economy seems also unable to find its footing. Without a recovery in economic activity, energy demand and prices should be expected to remain at current, or even lower, levels.

Provided that there will be no new, unpredictable and dramatic development in the geopolitical sphere, the above elements lead to the conclusion that for the rest of the winter, Greece and the rest of Europe, are not expected to have any substantial energy supply problems and prices are expected to move to current and perhaps, for oil, to even lower levels. For Greece, this means that electricity prices are also expected to remain at current levels.


* Michalis Mathioulakis is an Energy Strategy Analyst, the Academic Director of the Greek Energy Forum, and an ELIAMEP Research Associate on energy issues.