Gas Prices Slammed by Tariff Shock: What’s Behind the Collapse—And What’s Coming Next?
There is a tariff effect also on the price of gas in Europe, which has been plummeting since President Trump announced reciprocal tariffs, significantly escalating the trade war.
Specifically, European natural gas futures have fallen by around 7%, hovering just above €34/MWh on the morning of April 7. This extends a 10% loss from the previous week, bringing prices close to their lowest levels since September 2024. The sharp decline reflects fears that the ongoing global trade war could suppress industrial activity and reduce gas demand.
In essence, even natural gas—a key focus in Europe due to the continent’s vulnerability to price volatility—has been dragged into the vortex of Trump’s tariffs, much like crude oil. The financial and commodities landscape has darkened further following China’s announcement of retaliatory tariffs on U.S. goods, intensifying fears of a global recession.
Gas prices plummet in Europe, what happens after Trump’s tariffs?
Amid the broader market turbulence triggered by Trump’s announcement of reciprocal tariffs, which have spared no major trading partner and impacted multiple sectors, the gas price has also suffered shocks.
In Europe, gas prices on the Dutch reference benchmark have plunged. At the time of writing, natural gas is trading around €34.91/MWh. Since market open on April 2, the collapse has been around 18%.
The dynamic at play is straightforward: higher tariffs lead to higher costs for goods, which curb demand and industrial output. This, in turn, weighs on global economic growth—especially in sectors reliant on exports.
Analysts suggest that energy-intensive industries could be compelled to scale back production amid growing uncertainty, thereby reducing future energy consumption.
Moreover, increased oil output since May, coupled with potential revisions to European gas storage targets, could lead to higher supply levels. The market is also anticipating more LNG shipments to Europe as a result of declining demand in China. Weak Asian LNG consumption throughout 2025 is expected to potentially keep European gas prices low.
European gas prices: what to expect with the tariffs effect?
According to consulting firm Auxilione, referencing the initial U.S. global tariff announcement, “companies were already publicly discussing possible shutdowns and production cuts in response to the tariff announcement.” With the trade war now fully underway, those decisions may soon be finalized.
Daniel Hynes, senior commodity strategist at ANZ, noted that the drop in European gas prices likely also reflects expectations of increased supply, as relatively higher tariffs on Chinese exports could redirect more LNG to Europe.
“Risks of weaker demand in China are also higher,” he added.
Rabobank analysts pointed out that lower LNG demand in Asia in 2025, compared to 2024, could have significant consequences for Europe despite the wider gap in storage injections this year. “With weak LNG demand in Asia, the benchmark gas price in Europe could fall to the EUR 30–40 threshold in 2025,” they said. For now, however, they maintain a base-case forecast of €40.
According to Trading Economics, TTF gas has fallen by €15.75/MWh or 31.21% since the start of 2025. EU TTF natural gas is forecast to trade at €37.97/MWh by the end of this quarter, with a 12-month projection of €42.63.
Original article published on Money.it Italy 2025-04-07 11:36:15. Original title: Perché il prezzo del gas sta crollando in Europa con la guerra dei dazi?
