Energy prices have become a familiar topic again. A year into the Ukraine conflict and after peaking last summer, gas, electricity, and fuel costs have retreated to levels seen before the surge. Brent crude oil moved from about 85 dollars to roughly 75, while natural gas fell more sharply—from around 140 euros per megawatt hour to just under 30 euros. Even with these declines, prices remain well below their peaks of over 130 dollars for Brent and more than 300 euros for gas, and today the gas price in the Spanish market sits near 25 euros per MWh.
Joan Batalla, president of Sedigas, notes that a milder winter and the stock buildup in underground facilities have created more favorable conditions than in the previous year. He emphasizes that while caution remains, the current market looks steadier, with the futures market forecasting around 30 euros per MWh for the third quarter. A key factor is the combination of lower demand and ample storage, which together reduce the risk of sudden price spikes that were feared last year.
Heavy industry, one of the sectors hardest hit by last year’s fuel-price spike, faced widespread shutdowns as Ukraine’s war disrupted supply. In December 2022 and January 2023, industrial gas consumption dropped by about 40 percent compared with a normal year such as 2019 or 2021. According to the industry’s employers’ association, the reduced demand has been the dominant driver of this contraction, with further smoothing measures in April bringing a drop of roughly 20 percent similar to declines seen during the pandemic period.
Veronica Rivière, president of GasIndustrial, underscores the ongoing uncertainty. She explains that while prices have fallen sharply from the September highs of 250 euros per MWh, it is unlikely that December prices will immediately fall to 25 or 30 euros per MWh. The outlook will depend on how Asia recovers, the severity of next winter, drought conditions, and the level of nuclear output in France. Numerous economic variables still influence the industrial sector’s behavior, making vigilance essential as conditions evolve.
Electricity generation is closely tied to the gas price, since gas often fuels the margin-setting mechanism for the wholesale power market. From mid-February the Iberian electricity market benefited from a reduced need to rely on gas, aided by abundant renewable capacity. As a result, wholesale electricity averaged around 71 euros per MWh last month. Carlos Martin Graña, Enerjoin’s operations manager, points to a “perfect storm” of high seller capacity in gas and electricity due to renewables and soft demand, and questions how long the easing trend can persist. He notes that if global demand stabilizes, especially in China, and consumption remains subdued, electricity prices could settle toward the 90 euros per MWh range.
Jose Luis Sancha, an energy market expert from a major Spanish university, maintains a cautious but hopeful view on regulated electricity bills. He suggests that once fixed contracts expire, prices in the free market could decline, potentially reaching around 40 euros per MWh for typical residential consumption—200 kWh per month with a 4 kW install. He also warns that the winter season could bring renewed pressure if photovoltaic output remains limited and demand climbs, though the gas price ceiling has been extended through December as a protective measure. The overarching expectation is that the worst is over, yet the risk of renewed volatility remains tied to broader energy dynamics and seasonal demand.
The global oil market has also shown sensitivity to supply decisions by major producers. In early April, the producer cartel announced a cut of more than 1.5 million barrels per day, a move that temporarily lifted Brent above 86 dollars per barrel before prices drifted again. Despite these fluctuations, fuel prices at the pump have generally cooled from their peaks; as of the latest readings, gasoline averaged 1.567 euros per liter and diesel 1.407 euros per liter. A spokesperson for the Spanish Association of Petroleum Products Operators highlighted that the production cuts did not necessarily tighten supply amid continued uncertainty about economic growth, and overall demand remained a key determinant of price movements. Attribution: energy market observations and statements from Sedigas, GasIndustrial, Enerjoin, and the Pontifical University context.