Expert: The price of gas can remain high for a long time – Finland has a significant advantage in the middle of the energy crisis

The conflict that started with the attacks of Israel and the United States on Iran and spread more widely to the Persian Gulf region has skyrocketed the price of oil and gas and has already been seen at the gas pump.

If a solution to the crisis is found, the oil market can recover quickly and prices can return to a more moderate level. However, the situation is different for gas, says an expert from the Finnish Confederation of Finnish Industries EK who is familiar with the energy market Arttu Karila.

Karila estimates that the price of gas can remain high for up to two years, even if a solution to the crisis is found.

This is because the situations in the oil and gas market were very different when the crisis broke out, explains Karila. Last year, the oil cartel OPEC+ significantly increased the supply of oil and there was even an oversupply of oil. On the other hand, on the gas side, Europe in particular has still not recovered from the withdrawal from Russian gas imports.

There has been a slight oversupply of oil, but the price of gas is comparatively high. Therefore, the oil market could recover faster than the gas market.

Energy policy is also security policy

According to Karila, the crisis is a wake-up call for Europe in that breaking away from imported fossil energy is not just a climate issue. It is also a question of safety and reliability.

“Fortunately, this has now been brought up at the EU level.”

When considering measures to soften the impact of the fossil energy crisis on Europe, it is important to avoid a situation where the measures actually worsen dependence on imported fossil fuels, says Karila.

This applies, for example, to efforts to regulate prices with subsidies or price restrictions, as well as wishes to weaken emissions trading.

“Although the intention could be good, interfering with the market in conditions of growing demand encourages continued consumption.”

Because the shock to the oil market is so huge, mitigating its effects with national measures would be very expensive.

“You have to think carefully about how to possibly soften the blow, especially if the crisis is prolonged, and how the support measures should be targeted.”

Finland is a pioneer in Europe

If the price of gas remains high for a long time, Finland will be in an exceptionally good position among European countries, because here 96 percent of electricity production is fossil-free.

“This brings a significant advantage in relation to Central Europe, and the crisis has not yet been reflected in the price of electricity.”

On the other hand, when it comes to fuels, Finland relies on imports. Fuel prices have risen, although availability problems have not yet appeared, Karila adds.

Although Finland is not directly dependent on imported gas for electricity production, gas is an important part of electricity production in the large European economies, especially in Germany, and any problems with gas imports could therefore be reflected in the entire European economy and thereby cause problems for Finland as well.

However, Germany also has some opportunities to use coal and lignite in conditions of high gas prices, which can soften the blow, says Karila.

“Coal comes in significant quantities from, for example, Australia and Colombia, so there shouldn’t be similar availability problems, even if the rise in gas prices also increases the prices of coal to some extent.”

Although there are some flexibility mechanisms, Europe is desperately waiting for new gas production capacity, which is being completed in the United States and Canada, for example.

“Unfortunately, European gas reserves are at their lowest level in recent history due to the cold winter.”

There may be more upward pressure on prices

Saturday’s news about Yemen’s Houthi rebels joining the conflict shows how the nature of the crisis is constantly changing and the changes can be very fast, says Karila.

“Unfortunately, when the crisis shows signs of expansion, concern arises about how to secure logistical routes.”

This raises concerns about how to secure, for example, Saudi Arabia’s western pipeline, which has been able to supplement the daily oil shortage of 20 million barrels with 7 million barrels.

The escalation of the crisis in the Red Sea region would probably force sea traffic to pass through Hyväntoivonniemi, which could challenge cargo capacity and lengthen transport times, Karila estimates.

Prices are also raised by the fact that Asian demand has moved to the same markets as Europeans, which is a bad thing for Europe, says Karila.

The fact that China and the United States can set export restrictions on, for example, petroleum products also creates its own risk for the international energy market.

“In the United States, the development of fuel prices is closely watched, and if concerns grow there, export restrictions can be set, which would have international effects.”

Correction on 28 March 2026 at 17:08: Clarified that Finland is not dependent on imported gas for electricity production.