Russia’s invasion of Ukraine in February has upended global energy markets in a matter of weeks. The severe volatility of oil and natural gas prices since then, along with the reactions of policymakers across the world, have few parallels. Not since the Arab oil embargo of 1973, the Iranian revolution of 1979, or more recently, the Gulf War in 1990, have energy markets been jolted so severely.
The stage is set for natural gas trade flows to shift, the energy transition to accelerate and a new phase of volatility to emerge in commodity markets. This report provides an early glimpse of what may be next. NGI’s LNG Insight takes a look back at some of the big moves that have occurred in the global gas market since Russia’s incursion and analyzes themes that may dominate in the weeks and years ahead
The Special Edition Includes...
- Can Europe reduce its reliance on Russian natural gas?
- A look at whether the United States can send more LNG to Europe
- Learn how the conflict has pushed Russia and China closer together
- Russia is exploring relationships with other possible gas buyers as its ties to Europe weaken
- Analysis of how the conflict is reshaping energy policy in some of the world’s leading markets
- How will increasing LNG exports impact U.S. natural gas prices?
- U.S. energy infrastructure faces a resurgent cybersecurity threat as Russia steps up its efforts
- Development of new LNG infrastructure in Europe to import more supplies is accelerating
REPORT HIGHLIGHTS
In theory, the United States could hit the aspirational targets. The country has driven global LNG supply growth for years, putting it in a position to better aid Europe as it looks to break away from Russia. U.S. terminals have been operating at or near capacity for months.
“Europe will likely take the majority of the incremental volumes out of the Atlantic Basin,” he said. “That would be mainly the U.S., Trinidad and Tobago, and West Africa.”
The U.S. government reiterated warnings this week that Russia could be preparing cyberattacks in response to economic sanctions for its war in Ukraine, raising yet another alarm for the American oil and natural gas industry and other critical infrastructure operators.
Despite Western sanctions against Russia, the country may become closer energy partners with India after the two governments recently discussed the potential for further oil and gas deals.
“The Biden administration has immense power today to change the narrative,” Pelton said.
Europe’s energy crisis has been a boon for American liquefied natural gas (LNG) exports and Russia’s incursion into Ukraine puts them in an even better position, but the attack underway is expected to not push U.S. natural gas prices significantly higher.
“China is in a difficult position,” geopolitics energy specialist Marco Giuli of the Brussels School of Governance in Belgium told NGI. China is unlikely to go along with the West and sever ties with Russia, he said.
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