Russia’s natural gas cuts to Europe are ramping up competition for LNG supplies in other parts of the world. Japan and South Korea are moving up LNG purchases on fears that Europe will also hoard supplies, traders told Bloomberg. Buyers in other countries, including India and Thailand, are also trying to obtain supplies to avoid shortages. Loading Something is loading.
Russia’s cuts to European energy supplies have set off a global scramble to secure liquefied natural gas and avoid shortages this winter.
Utilities in Japan and South Korea are now moving up plans to purchase LNG cargoes in anticipation of Europe hoarding cargoes, traders told Bloomberg.
Buyers in India and Thailand, which typically are more sensitive to higher prices, are also reportedly considering buying more.
China, meanwhile, has remained at bay due to stringent lockdowns from rising Covid-19 infections. Beijing was the top importer of LNG in 2021, and an uptick in consumption there could further constrain global supply.
The pressure on countries to ensure supply of LNG, which is crucial for power and heat, has only worsened since the onset of the Russian cutbacks.
The rush to hoard LNG is also adding to inflation and could push prices higher. Traders told Bloomberg that LNG spot prices in north Asia could hit $40 per million British thermal units, a level not seen since the onset of Russia’s invasion of Ukraine, amid disruptions at key US and Australian LNG export terminals.
US LNG is already in high demand as Europe looks for alternatives to Russia. The US has risen to become the world’s largest LNG exporter during the first half of 2022, EIA said, with at least 71% of exports going to the EU and the UK during the first five months of the year.
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