EU could become record-dependent on US gas due to war in Iran - analysts
Kyiv • UNN
Due to the war in Iran, the share of American LNG in the EU could reach 80% by 2028. The US risks overtaking Norway in terms of gas supply volumes.
European dependence on natural gas from the US is expected to rise sharply to record levels this year as the country helps offset supply losses from the Middle East, according to an energy think tank. This was reported by Bloomberg, according to UNN.
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Europe could receive two-thirds of its liquefied natural gas (LNG) from the US—a larger share than ever before, according to a report by the Institute for Energy Economics and Financial Analysis (IEEFA). The US could even overtake Norway, currently the largest supplier of pipeline gas to Europe, in terms of total gas supply share.
In the years following Russia's invasion of Ukraine in 2022, the European Union sought to diversify its gas sources to avoid over-reliance on a single supplier. Seaborne shipments of American LNG became a key replacement for pipeline supplies from Russia, but some European officials warn that the continent risks replacing one dependency with another.
Growing reliance on the volatile global LNG market also leaves the EU vulnerable to price spikes during geopolitical crises, such as the current conflict involving Iran.
"LNG has become the Achilles' heel of Europe's energy security, leaving the continent exposed to high gas prices and new forms of supply disruptions,"
Norway became the largest supplier of pipeline gas to Europe after supplies from Russia plummeted due to the war in Ukraine. However, Norwegian supplies have nearly reached their peak, while exports from the US continue to grow. Norway accounted for 30% of total EU gas imports in the first quarter, while the US followed closely at 29%.
Overall, gas supplies from the US to the EU could exceed Norwegian levels if Qatari LNG producers face prolonged disruptions due to the conflict with Iran, Jaller-Makarewicz noted.
Last year, the US provided about 58% of all LNG imports to the EU, the UK, and Turkey, and this share rose to 63% in the first quarter of this year, according to IEEFA. The EU itself could receive up to 80% of its LNG imports from the US by 2028, the report says.
Russia also continues to supply LNG to Europe, even setting record volumes in the first quarter, although a full EU ban on Russian fuel is set to take effect early next year.