At present, it is difficult to imagine a scenario in which natural gas prices return in the near future to the levels seen before the outbreak of hostilities involving Iran and the blocking of the Strait of Hormuz. However, claims that heating costs next season could reach the levels seen after Russia’s full-scale invasion of Ukraine in 2022 currently appear exaggerated, said Roberts Samtiņš, head of the energy company AJ Power group, in an interview with LETA.
He emphasized that the situation in Europe is better than in 2022, and there are no clear grounds to expect a shock of similar magnitude.
“There are currently very different views in the market about what might happen to natural gas prices. One view is that the current issues are not yet fully reflected in prices, as not only has the Strait of Hormuz been blocked, but part of the liquefied natural gas (LNG) capacity in Qatar—a major global LNG exporter—has also been damaged. Europe now relies heavily on LNG supplies, so the impact on Europe will be significant,” Samtiņš explained.
He added that forecasts suggest another wave of price increases could occur around mid-summer and in the second half of the summer, when gas storage facilities need to be filled and global competition for LNG intensifies.
However, when comparing the situation to 2022, Samtiņš noted that the major price shock at that time was caused by the near-total halt of pipeline gas imports from Russia, which created a physical shortage of gas, as LNG infrastructure was not yet sufficiently developed.
“Over the past four years, LNG capacity has significantly expanded,
and the share of renewable energy has also increased, helping to mitigate the impact of gas shortages. Therefore, we are unlikely to see a gas price shock of the same scale as in 2022,” he predicted.
At the same time, the impact of the Middle East conflict on electricity prices is currently barely noticeable. When hostilities involving Iran began, the cold season in Latvia had already ended, and gas consumption for electricity generation dropped significantly. This coincided with the spring flood period, when hydroelectric power plants began operating at full capacity, along with increased output from wind and solar energy sources.
As a result, the impact has been limited, and natural gas is currently no longer widely used for electricity generation, as renewable energy sources are sufficient to meet demand, Samtiņš noted.
Nevertheless, the head of AJ Power stressed that events during the pandemic, in 2022, and especially now clearly demonstrate how closely Latvia is tied to the global economy and energy markets.
Any global developments immediately affect the country,
and as a relatively small state, Latvia can experience these impacts more strongly.
Therefore, it is crucial to strengthen Latvia’s energy independence by increasing the share of renewable energy sources and reducing the influence of global events on the domestic economy.
According to Firmas.lv, the largest companies within the AJ Power Holding group are AJ Power, AJ Power Gas, and AJ Power Recycling.
In 2024, AJ Power reported a turnover of 55.598 million euros and a profit of 1.854 million euros. AJ Power Gas recorded a turnover of 28.2 million euros and a profit of 69,656 euros, while AJ Power Recycling had a turnover of 5.144 million euros and a profit of 417,800 euros. The group’s financial results for 2025 have not yet been published.
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