What did you expect, Europe?
Europeans are going to be without gas. Politics ALWAYS destroys wealth and prosperity, especially when you target the most fundamental resource that any economy needs– Energy.
Sources
- USA
Of what is being sold, it’s going for higher prices than they were getting otherwise after the Nordstream pipeline exploded last year.
The USA have signed long-term contracts. Although if most of these imports are going to fight battles in Europe, the local people won’t see any of that supply.
2. Russia
Russia has been hit with economic sanctions forcing the Europeans to buy Russian gas from the middle man (Saudi Arabia, India, UAE, Turkey) who received Russian fuel imports just to broker it later. Although it stands that Europe, for purely political reasons, are opposed to cheap, easily accessible Russian gas (and the Russians are willing sellers!)
This shouldn’t come as news to you, especially if you’re European and you saw the price of goods skyrocket.
3. Qatar/Middle East
This is the big news headline. … It comes as a major shock since Italy vowed to be the fuel storage location for the rest of the continent.
Italy becomes the first country in Europe to see energy security directly affected by the ongoing fights in the Red Sea between US & UK navies and the Houthi rebels.
An incoming LNG cargo from Qatar to the Adriatic LNG terminal, the largest in Italy, has been delayed. LNG shipments due in Jan/early Feb have been cancelled altogether. Edison Energy signed a major 25-year import contract with Qatargas for 6.5 bcm/y of LNG to be shipped to the terminal.
This LNG terminal is one of the largest import infrastructures in the Mediterranean Sea. The terminal is a joint venture between ExxonMobil (70%) Qatar Energy (22%) and Snam (7.3%) This pairs up with the strategy to transform Italy into an energy hub at the centre of the Mediterranean Sea and an energy hinge between Europe and Africa, securing gas supplies from the Global South and the Middle East for domestic consumption and other EU peers such as Germany
After the curtailments of Russian gas supplies, the Adriatic LNG’s capacity has been upgraded to 9 bcm/y in order to secure additional LNG cargoes. Italy was among the largest importers of Russian gas in Europe and since 2022 it has been looking for alternative sources of gas
While Algeria became the largest gas supplier to Italy through the Transmed pipeline, Qatar has been the most important LNG supplier to Italy, with more shipments than the USA.
New contractual shipments to European clients, including Italy, should start from 2026. However, the transformation of the Red Sea into a perpetual battleground between Western navies and Houthi rebels threatens LNG routes from the Middle East to the Mediterranean Sea. It’s also questionable how the European economy will hold up until these new contracts are signed.
Rerouting Qatar’s shipments to the Cape of Good Hope and then Gibraltar makes LNG exports to Europe uneconomical. Without Suez, Asian markets such as China, India, and Vietnam are much closer. Would Qatar intervene to stop Houthi’s attacks or will it pass the buck to the West when they can just sell East?
#StayOnTheBall
