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Russia Surpasses U.S. as Europe's Top Natural Gas Supplier

17 Jun 2024 3:00 pm
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MUMBAI, 17 Jun (Commoditiescontrol): Last month, Russia reclaimed its position as the largest supplier of natural gas to Europe, surpassing the United States for the first time since 2022. This shift comes amid ongoing European efforts to reduce reliance on Russian energy supplies.

Tom Marzec-Manser, head of gas analytics at ICIS, remarked to the Financial Times, “It’s striking to see the market share of Russian gas and liquefied natural gas (LNG) inch higher in Europe after all we have been through, and all the efforts made to decouple and de-risk energy supply.”

Despite the European Union's attempts to curtail the influx of Russian natural gas, recent developments suggest more rhetoric than concrete action. Bloomberg recently reported that the EU is exploring options to maintain gas flows following the expiration of Russia's gas transit deal with Ukraine at the end of the year. Ukraine has declared it will not renew the transit agreement with Gazprom, creating a potential supply issue for some EU member states reliant on these pipelines. Consequently, the EU and Ukraine have sought assistance from Azerbaijan to mediate a continued flow of gas from Russia.

Simultaneously, the EU continues to implement sanctions against Russia and is attempting to ban Russian LNG imports, despite these imports reaching record levels. In contrast, imports of LNG from the United States have declined, as highlighted by ICIS data.

The data shows that Russian gas imports accounted for 15% of the gas needs of the EU, the UK, Switzerland, and the Western Balkans, while U.S. imports covered 14%. However, this situation is expected to change. “Russia has limited flexibility to hold on to this share in Europe as demand rises into next winter, whereas overall U.S. LNG production is only growing with yet more new capacity coming to the global market by the end of the year,” Marzec-Manser explained.

Additionally, with the approach of summer, Russia is likely to redirect more LNG shipments to Asia via the Northern Sea Route, Marzec-Manser added.

As Europe navigates these complex energy dynamics, the ongoing shifts in gas supply underscore the challenges in achieving energy independence and the geopolitical intricacies involved in global energy markets.

(By Commoditiescontrol Bureau; +91 98201 3018)

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