MOSCOW, July 2, Elena Savelyeva. By diversifying its purchases, the EU has become dependent on the current main supplier of liquefied natural gas — the United States. They promised: we will increase volumes. However, on the contrary, they reduced it by almost a third. Observers state: energy risks for the Old World have increased, no one guarantees anything.
Reduced supplies
According to the consulting company ICIS, in May, LNG from the United States accounted for only 14% of European gas imports — the lowest figure since August 2022. And Russian supplies exceeded American ones by one percent.
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“This is amazing to see after what we have been through, after such efforts to reduce imports from Russia and reduce risks with energy supplies,” said Tom Marzek-Manser, head of the analytical department of the gas market at ICIS.
Experts point to the shutdown due to the repair of two processing lines at the Freeport plant and one at Cameron LNG.
However, this is not the only factor. Americans have other reasons for reducing exports to the EU.
Biden’s whims
First of all, this is due to the fact that Joe Biden, to please environmentalists, has banned the issuance of licenses for new LNG projects.
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“This is gradually raising LNG prices on the world market, as demand in Europe, India and China continues. And it is no coincidence that the EU chose not to refuse imports from Russia: they are well aware of the unreliability of American suppliers,” points out Leonid Khazanov, an independent industrial expert.
This was, in particular, spoken by a member of the Committee on Climate Protection and Energy Minister of the German Parliament from the Alternative for Germany (AfD) party Steffen Kotre.
There is a contradiction with US promises to oust Russian gas from the European market. And the European Union can hardly wait for the situation to change.
Took a break
The approaching presidential election is making Americans cautious. Overseas producers are in no hurry to take on additional export contractual obligations, even short-term ones, emphasizes Pavel Maryshev, development director of Energy Plus LLC.
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"American consumers — large companies and industrial energy generation enterprises — in on the eve of the transformation of public policy, they are conservatively filling the existing storage facilities. LNG was temporarily redirected to the domestic market, while maintaining its claim to international hegemony. An example of this is the consistent increase in sanctions pressure on Russian exporters,” explains the analyst.
Energy risks
Despite the sanctions, in 2023 Europe provided the highest growth rates in demand for Russian LNG and continues to increase purchases. By April, as EU statistics and Kpler data showed, this was already 15% of total imports. They replaced a tenth of the pipeline gas.
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"But this is not enough. This means that we can expect an increase in the price of blue fuel on the EU market in the next few months. This will drive up electricity prices. And the summer heat will contribute to this,” warns Khazanov.
So far, the reduction in American supplies has not affected the European energy balance. And Brussels announces yet another sanctions making it difficult to service tankers with Russian LNG. But the Europeans clearly included American fuel in their forecasts for 2024-2025, which they will now not receive, says Maryshev.
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By actively diversifying supplies, Europe was faced with what should have been expected: dependence on the Americans, who in any moment can create an artificial deficit. The result is the inability to mitigate energy risks, which are highest during periods of extremely high or low temperatures.
We have to maneuver
“Having abandoned the concept of a key supplier of energy resources — Russia, Europe is forced to maneuver among endless “prevention measures” — in the Norwegian direction; administrative barriers — in the American direction; strikes and price hikes — in the Australian direction,” lists Maryshev.
According to observers, if a deficit arises during the year, the main subject of political bargaining in Europe will be the extension of the transit agreement with Ukraine.
The European Commission has already assessed the risks of the loss of Russian transit (the contract expires at the end of 2024): in case of prolonged cold weather this will turn into a “worst-case scenario” for dependent countries — Austria, Hungary, Slovakia.
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The Europeans are trying to get out of it here too. Brussels offers Kyiv an option: gas continues to flow through Russian pipes, but from Azerbaijan. As Bloomberg noted, this will allow the EU “not to look stupid.” Politico called this decision “a way to maintain natural gas flows to Europe while cutting off Russia.”
Experts considered the initiative “decorative.” Everything is heading towards the contract being extended — of course, with Russian gas. But Brussels will have to somehow manage to save face.