Russia's LNG clout, Russia was close to overtaking the US as Europe's top supplier
Russia was close to overtaking the US as Europe's top supplier of liquefied natural gas this month, despite efforts by the region's politicians to block its fuel and punish Moscow for the war in Ukraine.
The outcome is not so much about higher imports from Russia as it is slumping flows from America. The gap between the two countries' LNG deliveries to western Europe shrank in July to the narrowest since late 2021, according to preliminary ship-tracking data compiled by Bloomberg.
The dramatic shift illustrates how shippers of US LNG will always choose a higher-paying region to point their tankers to. American seaborne gas typically doesn't have destination restrictions. As soon as hot weather boosted demand in Asia, more of it was delivered there than during any month since 2021.
Disruptions from tropical storms, meanwhile, have only exacerbated the shortage for Europe, with one of the largest US export plants suspending loadings for more than two weeks in light of Hurricane Beryl.
Competition is also ramping up elsewhere. Egypt, which is battling power shortages amid extreme temperatures and reduced domestic gas production, has boosted LNG imports. The North African nation has to pay a premium to European prices to attract supply and took a share of US flows this month.
While Europe doesn't need that much gas during summer, the change highlights how tense the competition for LNG shipments can become. If it continues closer to the peak-demand winter season, prices will inevitably rise.
It also shows Europe's difficulties in weaning itself off Russian energy.
The European Union hasn't implemented any outright ban of LNG imports from Moscow. Some expect a transshipment prohibition set to begin next year may even lead to more fuel staying in Europe, as it will complicate logistics for Russian ships.
The outcome is not so much about higher imports from Russia as it is slumping flows from America. The gap between the two countries' LNG deliveries to western Europe shrank in July to the narrowest since late 2021, according to preliminary ship-tracking data compiled by Bloomberg.
The dramatic shift illustrates how shippers of US LNG will always choose a higher-paying region to point their tankers to. American seaborne gas typically doesn't have destination restrictions. As soon as hot weather boosted demand in Asia, more of it was delivered there than during any month since 2021.
Disruptions from tropical storms, meanwhile, have only exacerbated the shortage for Europe, with one of the largest US export plants suspending loadings for more than two weeks in light of Hurricane Beryl.
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| Mashadifx |
Competition is also ramping up elsewhere. Egypt, which is battling power shortages amid extreme temperatures and reduced domestic gas production, has boosted LNG imports. The North African nation has to pay a premium to European prices to attract supply and took a share of US flows this month.
While Europe doesn't need that much gas during summer, the change highlights how tense the competition for LNG shipments can become. If it continues closer to the peak-demand winter season, prices will inevitably rise.
It also shows Europe's difficulties in weaning itself off Russian energy.
The European Union hasn't implemented any outright ban of LNG imports from Moscow. Some expect a transshipment prohibition set to begin next year may even lead to more fuel staying in Europe, as it will complicate logistics for Russian ships.
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