The fact that Russia is nearly surpassing the US as the No. 1 LNG supplier to Europe is not due to higher LNG imports from Russia but due to a decrease in US shipments, according to Bloomberg.
The gap in the amount of LNG delivered by the US and Russia to Western Europe in July fell to the narrowest level since the end of 2021, according to ship tracking data compiled by this news agency.
This drastic change highlights the fact that US LNG carriers always choose higher paying areas to direct their cargo to. Shipments of US gas by sea generally do not have any destination restrictions.
As hot weather boosted demand in Asia, US LNG deliveries to Asia in July rose to a higher level than in any month since 2021.
Meanwhile, disruptions due to tropical storms exacerbated shortages in Europe because the largest gas export production plant in the US had to suspend operations for more than 2 weeks due to the impact. of superstorm Beryl.
Competition is also increasing elsewhere. Egypt - a country struggling with electricity shortages - has increased LNG imports. Egypt had to spend more money than the LNG purchase price in Europe to attract supplies and received part of US LNG in July.
Europe doesn't need much gas in the summer, but the change shows how intense LNG competition can be, Bloomberg notes. If the situation continues as winter approaches, gas prices will certainly increase.
In addition, the latest developments in the LNG market also show Europe's difficulties in escaping dependence on Russian energy.
Currently, the European Union has not implemented any complete ban on LNG imports from Russia. However, on June 24, the EU Council approved the 14th sanctions package against Russia, which prohibits the purchase or import of LNG from Russia through EU terminals not connected to the bloc's gas network.
