The threat of strikes at several Australian ports exporting liquefied natural gas (LNG) rocketed up prices for the fuel across Europe from around €30 per megawatt-hour on 8 August to €40 the next day.

After Russia cut gas supplies to Europe, beginning in September 2021 and virtually ending them during the Ukraine war, Europe pieced together other sources of supply, mainly LNG from the U.S. and a few other sources.

That has left the continent’s price for a key fuel floating on the twists and turns of the global market.

“Europe has understandably backfilled Russian pipeline supply with LNG, but that versatility leads to increased price volatility,” Tom Marzec-Manser at consulting firm ICIS said to The Wall Street Journal.

LNG made up about 20 percent of Europe’s natural gas mix before hostilities with Russia heated up. Last year, the figure rose to 34 percent and is expected to climb to 40 percent this year as the continent finishes refilling its gas reservoirs ahead of winter.

If Australian strikes push Asian countries into the market to find replacements for LNG from Down Under, prices worldwide are likely to shoot up.

“A lot of U.S. [LNG] volume currently being sent to Europe could be taken to Asia, raising the risk of an inter-regional bidding war,” Kaushal Ramash, chief LNG analyst at consulting firm Rystad Energy, told the WSJ.

Europe already has stockpiled about 90 percent of its gas needs for the coming winter. However, “the market remains unstable as this winter could still turn severe and rapidly deplete storage,” he added.

Europe was the world’s chief importer of LNG in 2022.

On 14 August, Europe’s gas price closed at €34.75.

TRENDPOST: Europe has embarked on a 10-point plan to shift a significant share of its energy demand to renewable resources. However, the global economic slowdown and the region’s own economic weakness is slowing progress. As a result, Europe will remain a competitor in the global LNG market for years to come.