Europe’s gas mix keeps shifting toward LNG, reshaping pricing and supply risk

Europe’s gas supply structure is continuing to evolve in ways that are directly feeding into market pricing and perceived supply security. During calendar week 13, LNG played an increasingly dominant role, reflecting a broader shift away from pipeline dominance and toward a system where global conditions matter more for day-to-day outcomes.

Norway leads EU imports as LNG capacity expands

In 2025, Norway emerged as the largest supplier of gas to the European Union, accounting for nearly one-third of total imports. The United States followed as a major contributor, a pattern that aligns with the rapid expansion of LNG export capacity.

Russia’s decline marks a structural break

Russia’s share of European gas supply has fallen sharply over the period. It dropped from approximately 40% in 2021 to around 13% in 2025 when combining pipeline gas and LNG. The change represents one of the most significant structural shifts in Europe’s energy landscape.

LNG brings flexibility—and volatility

The move away from Russian pipeline gas has increased Europe’s reliance on LNG imports. LNG is typically more flexible than pipeline deliveries, but it is also more volatile. Pipeline gas is usually delivered under long-term contracts, while LNG trades on a global market where prices are influenced by supply-demand conditions across multiple regions.

New sensitivities for prices and power markets

This transition has introduced additional complexity into European gas trading. Prices have become more sensitive to global events, including weather patterns, shipping constraints, and geopolitical developments—factors that can quickly alter availability and costs across regions.

For South East Europe (SEE) markets, the implications are particularly direct because gas remains the marginal fuel for electricity generation in many countries. When gas prices move, power markets feel the impact as well.

Diversification reduces dependence but adds logistical risk

Greater reliance on LNG also raises questions about supply security. Diversification has reduced dependence on a single supplier, but it has shifted risk toward global competition for cargoes and logistical constraints tied to moving fuel across shipping networks.

LNG growth ahead depends on demand keeping pace

Looking forward, the role of LNG is expected to grow further as new export capacity comes online in the United States and other regions. However, the expansion will need to keep pace with rising global demand; otherwise, Europe could face continued price volatility even as its import sources diversify.