On Monday, May 18, Bloomberg reported that European imports of liquefied natural gas (LNG) are on track to decline for a second consecutive month in May, as the war and disruptions caused by the Islamic Republic in the Strait of Hormuz have affected fuel flows and redirected more cargo shipments toward Asian markets.
According to ship-tracking data, Europe’s LNG imports during the first two weeks of May continued the downward trend observed in April. Bloomberg, citing estimates by the data analytics firm Kpler, reported that European imports by the end of May could decline by more than one percent compared with the previous year, following a seven percent drop in April.
This trend comes as higher prices in Asian markets continue to divert LNG cargoes away from Europe and toward Asia.
The Islamic Republic’s attack on Qatar’s Ras Laffan facilities on March 2, the world’s largest LNG liquefaction complex, reduced Qatar’s LNG production capacity by approximately 17 percent and drove LNG prices in Asia up by more than 140 percent.
Reuters had previously reported that the attack had taken two Qatari LNG production units offline, and that a full restoration of production capacity could take several years.
Europe is facing these declining imports while its gas reserves, following the winter season, have fallen below 30 percent, reaching near their lowest levels in several years. ACER, the European Union’s energy regulator, has warned that achieving the target of filling storage facilities to 90 percent before winter could prove difficult without additional supply sources, while competition with Asia may further increase the cost of replenishing gas reserves.
