Daily Energy Report
EU’s dependence on Russian gas, US sanctions on Venezuela, India and the yuan currency for oil payments, Putin’s visit to China, US SPR, Germany’s diesel imports, and more.
Chart of the Day: EU Remains Dependent on Russian Gas
Figure (1) above shows EU natural gas imports by source. About 54.3% is received through pipelines while the rest (45.7%) arrives as LNG. The largest exporter via pipeline is Norway, followed by Algeria and Russia.
EOA’s Main Takeaway
Our calculations show that the EU’s LNG imports hit a 21-month low in September, reaching 6.7 million tons (equivalent to 9.16 billion cubic meters). It is evident that high gas stockpile levels that stood at 95% in September have muted demand for LNG imports. France was the largest importer in September with 1.5 million tons, followed by Spain (at around 1.4 million tons), and the Netherlands at 1.1 million tons.
The LNG segment includes imports from Russia, and the bloc’s dependence on Russian gas remains around 20%. However, imports from Moscow are expected to increase if the labor strikes in Australia reduce LNG exports from there to Asia. In such an event, Asian countries will compete with Europeans for available supplies, thus forcing Europe to import more Russian gas. Additionally, Europe will likely increase imports of Russian gas supplies in case of a severe winter. We estimate that Gazprom’s gas exports to the bloc could reach 26 bcm by the end of 2023, down from the 62 bcm delivered last year.
As for gas prices in Europe, they will increase in case of labor strikes in Australia, or a severe winter in the continent.
Story of the Day
The US and Venezuela are expected to announce tomorrow an agreement that will ease US sanctions on Venezuela’s oil industry in exchange for an open election in the Latin American country in 2024.