Market Environment

Average annual macroeconomic data

Gas market

At the start of 2025, natural gas demand in Europe was strongly influenced by the cold weather at the end of winter as well as concerns about low stock levels, which kept average spot prices on European markets relatively high during that period.

From late February, however, prices fell sharply, driven by rising temperatures and growing market conviction that the EU’s gas storage targets for the following winter season would be relaxed. The downward trend was further amplified by market uncertainty over the potential impact of new US tariffs on the global economy, first announced in April 2025.

In the second half of the year, lower prices on European markets were mainly attributable to weak demand signals and expectations of growing global LNG supply. Local supply also remained strong, particularly due to robust deliveries from Norway, which ensured high and stable volumes of gas transmitted by pipelines from the Norwegian Continental Shelf.

Despite relatively low storage levels, the period from the start of winter to the end of 2025 brought no strong triggers for price increases. Supply conditions remained relatively comfortable and the market stayed stable, even as the first cold spell set in. This was supported by rising global LNG supply resulting from the commissioning of new export capacities, particularly in the United States. Geopolitical developments with the strongest impact on Europe’s gas markets in 2025 included changes in the US economic policy paradigm, namely plans to increase hydrocarbon production and LNG exports, and impose higher tariffs on trading partners.

Contrary to expectations, LNG demand from China remained relatively low, down by more than a dozen per cent year on year. Further growth in domestic gas production, closer gas supply cooperation with Russia, including expanded capacity of the Power of Siberia pipeline, and lower storage requirements following a mild winter combined to reduce competition on the global LNG market and increase the available supply in the Atlantic Basin.

At the end of July, a trade agreement was reached between the United States and the European Union. In addition to lower tariffs, it is expected to include purchases of energy products from the United States worth USD 750 billion over three years, including LNG.

Another factor shaping the gas market landscape was the prospect of an end to the war in Ukraine, along with US announcements concerning sanctions on Russia and buyers of its energy commodities. At times, this pushed prices higher on expectations of lower global supply. The European Union approved the implementation of the RePowerEU regulation, aimed at phasing out existing contracts with Russian natural gas suppliers and banning the conclusion of new ones. LNG supplies, particularly to countries in North-Western Europe, are to end by 1 January 2027, while pipeline supplies, particularly those reaching Hungary and Slovakia, are to cease no later than 1 November 2027, or by 30 September 2027 if storage targets are met.

2025 was the first year without Russian gas being delivered by pipelines through Ukraine. After the transit agreement between the two countries expired, Central European buyers switched to supplies from other directions. This coincided with Germany’s abolition of the gas storage neutrality charge, which had constrained natural gas trading in the region. As a result, the cost of transporting gas from Germany to Central European countries fell by an average of 60%.

Main gas sourcing in Europe* in 2024 and 2025

Crude oil market

2025 was the first full year of a structural oversupply in the crude oil market after the tight conditions seen in 2022–2024. Supply rose by around 3 million barrels per day year on year, while demand increased by only 0.7–0.8 million barrels per day. Geographically, supply growth was influenced mainly by non-OPEC+ countries, including the United States, Brazil, Canada, Guyana and Argentina. Demand growth, in turn, came mainly from non-OECD economies, especially China and India,

In structural terms, demand was supported by inventory builds (oil stocks in China; ‘oil on water’, i.e. crude in transit or floating storage) rather than by global refinery throughput, which rose only moderately. This supply-demand picture was reflected in oil prices, which remained on a downward trend, falling from a high of USD 83.06 per barrel in early January 2025 to USD 60.20 per barrel at the end of the year. Despite persistent geopolitical risks (the Middle East and the Iran-Israel-US conflict as the main systemic risk, the Russia-Ukraine war as an infrastructure risk, and sanctions on Russia and Iran as a political risk), Brent spot prices were ultimately driven by excess supply.

The market expects all demand growth to be fuelled by non-OECD countries, especially China and India. Demand in OECD countries is expected to remain flat or edge slightly lower. Petrochemicals are likely to be the chief driver of oil demand, with conventional fuels playing a lesser role. At the same time, the market continues to show a tendency towards inventory build-up, including in OECD countries, China, and the ‘oil on water’ volumes mentioned above.

Electricity market

According to data from Polskie Sieci Elektroenergetyczne (PSE), electricity consumption in Poland fell by 0.87% year on year in 2025, to approximately 167.5 TWh. As in previous years, industry and services accounted for the largest share of total consumption, while household demand remained relatively stable.

A number of factors may have contributed to lower electricity demand in Poland in 2025, including:

• improved energy efficiency in the economy;
• the continued growth of solar capacity, strong renewable generation in the spring and summer months, and rising self-consumption, which reduced demand for electricity drawn from the grid;
• weather conditions, including a relatively mild winter and the absence of prolonged summer heatwaves, which curbed electricity use for heating and cooling;
• subdued activity in some energy-intensive sectors;
• wholesale market price volatility and regulatory changes, including the expiry of statutory maximum electricity prices for local governments, public institutions, and micro-, small- and medium-sized enterprises, which may have encouraged more efficient electricity use and dampened demand.

According to preliminary PSE data, electricity generation in Poland totalled approximately 166.5 TWh in 2025, down by around 0.29% compared with 2024.

Installed electrical capacity in Poland* in 2024 and 2025 [GW]

Breakdown of the generation mix by primary energy source in 2025

In December 2025, installed capacity in hard coal-fired power plants stood at 21.91 GW, down 3.27% year on year from 22.65 GW. Installed capacity in lignite-fired plants totalled 7.62 GW, representing a 14.03% year-on-year decline from 8.86 GW. By contrast, gas-fired capacity rose by 8.03% to 6.12 GW, compared with 5.66 GW at the end of 2024.

Global and European gas prices

The average spot price of natural gas in Europe (understood as the price on the TTF, the most liquid European gas trading hub), rose from EUR 34.34/MWh in 2024 to EUR 36.10/MWh in 2025, an increase of 5% year on year. The average price spread between the THE and TTF markets in 2025 was EUR 1.03/MWh.

In 2025, the average front-month natural gas price at the Dutch TTF hub was EUR 38.15/MWh, marking a 12.6% increase on 2024. Similarly, front-month natural gas prices at the Henry Hub rose to EUR 10.76/MWh from an average of EUR 7.32/MWh over the same period. Consequently, the average price spread between the European and US trading hubs expanded by EUR 0.82/MWh, to EUR 27.27/MWh, a 3.1% change year on year.

Gas prices in Poland

In 2025, the average spot price (RDNiBg) of natural gas in Poland was EUR 41.48/MWh, based on PLN-denominated prices converted into euros. This was EUR 2.13/MWh higher than \in 2024. A similar increase was recorded on the neighbouring THE market. The average spread between spot prices on POLPX and THE narrowed from EUR 4.76/MWh in 2024 to EUR 4.30/MWh in 2025. The spreads reflect the cost of cross-border gas transmission via interconnectors, as well as the regulatory burden associated with mandatory gas stockholding obligations imposed on importers.

Average monthly spot prices of natural gas in Poland and Germany in 2024–2025 [EUR/MWh]

According to POLPX data, in 2025 the total gas trading volume was 208.9 TWh, of which 175.6 TWh was traded on the futures market (RTT). This means that almost 84.1% of gas trades in 2025 were executed under contracts with maturities of a year, season (summer, winter), quarter, month, and week. Natural gas trading volumes in 2025 were up by 52.8% from 2024. In 2025, spot trading volumes reached 28.3 TWh in the day-ahead market and 4.9 TWh in the intraday market, an increase of 31.7% and 29.5%, respectively, from 2024. The trading volume on RTT grew by 57.7% year on year.

Oil prices

In 2025, Brent crude opened the year at around USD 80–85 per barrel, and then gradually fell to about USD 70 in March and April. Prices rose sharply in June, briefly climbing above USD 80 per barrel, before easing again and stabilising in the USD 60–70 range. In the second half of the year, price movements remained volatile, but the overall trend was downward, with Brent moving towards approximately USD 62–65 per barrel at the end of December.

Brent crude prices (DTD) in 2025 [USD/bbl]

Electricity prices

Electricity prices in 2025 continued to be driven by movements in fuel and carbon markets, especially the prices of natural gas, hard coal and EU carbon allowances (EUAs). They were also influenced by conditions in the power system, including the generation mix within the merit order, that is the share of output from individual sources depending on their relative production costs and availability. More broadly, electricity prices also remained sensitive to general economic conditions and geopolitical factors.

BASE_Y-26 contract prices in 2025 [PLN/MWh]

TGeBase contract prices in 2025 [PLN/MWh]