Liquefied natural gas (LNG) imports to Europe are heading for a second consecutive month of decline due to the consequences of the war involving Iran, which has disrupted supplies. This was reported by Bloomberg, according to UNN.
Details
According to vessel tracking data, LNG shipments to the region continued the decline that began in April during the first two weeks of this month. According to estimates from the analytical firm Kpler, by the end of May, imports could decrease by more than 1% year-on-year, following a 7% drop in April.
The reduction in LNG imports comes amid a potential increase in gas consumption in Europe in May, Energy Aspects Ltd. notes. Although the rate of decline is less sharp than last month, and final figures may still change due to tanker diversions, the situation indicates a tightening supply deficit at a time when Europe is actively filling gas storage facilities ahead of next winter.
In May, heating demand rose periodically due to cold snaps, and gas consumption in the power sector also increased due to maintenance at certain lignite, coal, and biomass power plants, explained Energy Aspects analyst Erisa Pasko.
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At the same time, LNG shipments to China and other Asian countries have increased as local buyers seek additional spot volumes because Qatari gas is effectively blocked in the Strait of Hormuz area amid the conflict in the Middle East.
It is noted that after the start of the war, global gas demand decreased due to supply disruptions; however, during the hot months, Europe will likely have to pay more as demand for energy for cooling grows in Asia.
Currently, we are seeing an increase in vessel diversions to Asia, particularly due to stable demand in South Asian countries,
According to him, LNG import volumes to Europe were also affected by seasonal maintenance at certain European regasification terminals.
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