More than 70 percent of the U.S. liquefied natural gas (LNG) exports to Europe this year, the report showed. The U.S. has launched a massive “volume support” as Europe is on alert to secure gas due to a growing sense of crisis that Russia, which is invading Ukraine, can block gas supplies to Europe at any time. However, the gas supply to other countries such as Asia has decreased.
According to the U.S. EIA on the 7th (local time), about three-quarters of the LNG exported by the U.S. in the first four months of this year went to Europe. Last year, the proportion of LNG exports to Europe was only one-third. Bloomberg News explained, “This means that the U.S. share of LNG imports from Europe has doubled from 25% last year to about 50%.”
When the Ukrainian war broke out in February this year, the U.S. government promised to expand gas supply to Europe. This is because concerns have grown that Russia could start “weaponizing energy” to cut off the supply of European gas, taking advantage of Europe’s dependence on about 40% of the gas used in the region. Even before the war, Europe suffered a “gas crisis” in which gas prices soared due to the recovery of economic and industrial demand due to the easing of the COVID-19 pandemic.
As a result, the U.S., which is rich in LNG supplies, has started to provide massive gas support to Europe to strengthen its alliance. The U.S., which exported 71.6 million tons of LNG last year, is the third-largest LNG exporter after Australia (876 billion tons) and Qatar (77.4 million tons).
Europe plans to reduce Russian gas imports by one-third this year and replace them with U.S. or African imports from Africa.
The problem is that the supply of Asian gas, including Korea, has decreased as the volume of exports to Europe has increased. According to the EIA, the proportion of LNG exports in Asia from January to April this year was 25%, down by half from last year.
For this reason, there is already a competition for gas reserves in Asia. In general, energy importers begin to accumulate LNG for the next winter’s peak season during the summer, according to Bloomberg, and stockpiling has already begun this year. Korean and Japanese companies are securing delivery early next year, and LNG suppliers are turning their shipments to Asia toward Europe, which offers higher prices. This will lead to a shortage of supplies in the spot market, and the possibility of developing countries such as India and Pakistan facing problems is discussed