Europe’s natural gas market has entered a new era in which geography plays a much greater role in determining prices, with LNG-rich northwestern Europe consistently paying less than landlocked Central European countries after Russian pipeline gas stopped flowing through Ukraine, according to a new Oxford Institute for Energy Studies (OIES) report.
The study says the end of Russian gas transit via Ukraine in early 2025 fundamentally altered European gas flows, shifting supply towards northwestern Europe and Poland and creating what researchers describe as a persistent pricing hierarchy across the continent.
French trading hub TRF, Belgium’s ZTP, the Dutch TTF benchmark and Britain’s NBP have consistently become Europe’s cheapest markets, while Germany’s THE trades at a modest premium.
Prices then rise progressively further east, with the Czech VOB, Austria’s VTP and Slovakia’s SVOB recording the highest levels among the main hubs.
Unlike previous episodes of market fragmentation during the 2022 energy crisis, the report argues that this pricing pattern reflects a structural shift rather than a temporary market disruption.
“From April 2025, this produced a lasting change in convergence,” the report said, noting that while prices across European hubs continue to move largely in tandem, the gap between western and eastern hubs has become more persistent.
– LNG reshapes market dynamics
According to the report, the new pricing structure reflects Europe’s growing dependence on liquefied natural gas after Russian pipeline supplies dwindled.
Large volumes of LNG now enter Europe through terminals in France, Belgium, the Netherlands and Britain before being transported inland. As gas moves eastward, transportation constraints and cross-border capacity limitations contribute to progressively higher prices.
The report notes that a similar divergence first emerged during the 2022 energy crisis, when surging LNG imports into France, Belgium and the UK exceeded the available pipeline capacity needed to transport gas further east, causing those markets to disconnect from other European hubs.
Markets gradually rebalanced through 2023 and 2024 before Russian gas transit through Ukraine ended, creating a new and more durable pricing pattern.
Even the spike in oil and gas prices triggered by the US-Iran conflict in 2026 didn’t alter that hierarchy. While prices rose sharply across Europe, northwestern hubs remained the cheapest while landlocked Central European markets continued to record the highest prices.
– Trading volumes hit record
Despite the reshaping of supply routes, European gas trading continued to expand.
According to the report, traded volumes across European gas hubs increased by 16% in 2025, pushing annual trading activity above 100,000 terawatt-hours (TWh) for the first time, while underlying physical gas volumes also recorded a modest increase.
The study says the increase demonstrates the resilience of Europe’s traded gas market despite the loss of Russian pipeline supplies.
The Dutch TTF strengthened its position as Europe’s dominant pricing benchmark, accounting for 81% of total traded gas volumes, 53% of over-the-counter transactions and 87% of exchange-traded volumes. Overall trading at TTF was about 4.5 times larger than the combined volume of Europe’s other major gas hubs.
The report also highlighted Belgium’s ZTP as one of Europe’s fastest-growing trading hubs, reflecting rising LNG imports and increasing west-to-east gas flows across the continent.
