After a week of conflict in the Middle East, the price of European future gas on the Dutch floor increased from 30 euros to more than 50 euros per MWh.
This was still a poor 2022 crisis, about 340 euro. But Laurent David, the Secretary-General organised countries importing liquid gas (GIIGNL), warning tensions if the conflict persists.
"The gas field is less liquid than oil and has very few large supply," he noted. As of 7/3, no gas shipment passes through the Hormuz Channel, the maritime routes about 20% of the global LNG per day, which is approximately 120 billion m3 per year. In Qatar, the largest LNG plant in the world has been discontinued earlier this week.
If the price continues to rise, Europe has very little to respond to. The world's LNG plants operate almost maximum capacity. Norway, the largest internal gas provider EU, is pumping gas at maximum capacity.
Get out! [The LNG floats in Wilhelmshaven City, Germany] Image: Reuters.](httts
- ING floated in Wilhelmshaven, Germany. Image: Reuters. *
Experts warn of the risk of "the war for gas" between Europe and Asia on the immediate transaction market, where the shipments are being traded daily for the highest price party. According to Kpler's data, from March 4, at least four LNG carriers have suddenly changed course. They initially expected French, Belgian, or Spanish ports after coming from Africa and America, but then went back to Asia.
According to Ole Hvalbye, analyst at SEB Research, the global market expected to miss around 7 million tons of LNG (as of 9.7 billion m3). In it, Europe may suffer a reduction of 5.5 million tons due to competitive pressure from Asia.
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This would push the gas prices in Europe up to 60 euros per MWh. The fact that Qatar's LNG Ras Laffan complex discontinues its long-lived activity has resulted in a scarce global gas risk, similar to the 2022 crisis. Therefore, according to analysts, do not rule out LNG prices to 100 euro a MWh.
As of 2022, Europe has stopped entering gas through the pipeline but has continued to purchase the Russian LNG, which is currently the largest provider with 25,4% of the share, while supply from Qatar and UAE is only under 10%.
However, on March 6, Deputy Russian Prime Minister Alexander Novak said that he had discussed with energy companies the possibility of diverting the country from Europe to India, Thailand, the Philippines and China, adding a new blow to Europe. "Our companies are considering opportunities without waiting for further restrictions from Europe," he said.
European Union officials say there is no risk of a gas shortage and the situation is still under control. But after the harsh winter, their reserves were only 29%, significantly reduced to the same time as the 2024 and 2025.
Professor Thierry Bros at the University of Sciences Po (June) pointed out in 2022, Europe spent nearly 4,000 billion euros on power grants. "That cannot be repeated. We're going to have to deal with a crisis without 'the gas'," he said. If the price is 100 euros, some factories may have to close and transfer production to the US.
Chemicals, glass, and EU foods say gas prices increased "start the impact", according to the Federation of energy consumption industries (UCIS). The transition to oil was also not the solution, as the price of the goods also escalated.
Angell An (in Reuters, Le Monde*)
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