Daily Energy Report
Germany’s gas imports, Israel’s crude imports as KBT flows remain shut, Europe’s oil challenges, India and Russian crude supplies, drilling in Mozambique, and more
CHART OF THE DAY: Shift In Dependency from One Country to Another!
Germany’s historic appetite for gas from Russia has significantly changed after Moscow’s invasion of Ukraine. Europe’s biggest economy decided to reduce its reliance on gas from Russia, with the aim to end all gas imports over the course of two years.
For its part, Russia gradually reduced its gas supplies via the Nord Stream 1 pipeline and eventually halted all flows in late August 2022. Later in September, both the Nord Stream 1 and Nord Stream 2 pipeline networks were sabotaged and the two went out of service, eliminating any possibility to revive Russian gas exports in the near term. Consequently, Russia’s gas share in Germany’s supply mix declined dramatically to zero by the end of the year for the first time in a while as shown in Figure (1) above.
In 2022, Norway replaced Russia as Germany’s top gas supplier, providing about one-third of its gas imports. According to data from the Norwegian pipeline system operator, Gassco, Norway increased its gas deliveries to Germany by 11% year-on-year to 54.8 billion cubic meters (bcm). Germany has also imported gas volumes from the Netherlands and Belgium to offset lost Russian gas flows.
Overall, Germany’s total gas imports fell by 12% year-on-year while its gas consumption decreased by 17.1%, according to Germany’s Federal Network Agency data. Such a decline in consumption was not possible without government saving measures, as well as the mild winter season that reduced gas demand for heating purposes.
Since the beginning of 2023, Germany has not received any Russian gas, and the heating season passed without gas shortages, thanks to the pipeline networks the country shares with many European nations.
EOA’s Main Takeaway:
Germany is set to increase its LNG imports over the incoming months when the three remaining Floating Storage Regasification Units (FSRUs) come online and are offered on the open market. The German Economy Ministry previously guaranteed that its chartered FSRUs in Brunsbuttel and Wilhelmshaven will be used at full capacity until April 2024. After that, the facilities will also be offered on the open market. As for its onshore terminal at Brunsbuttel, the German government has secured 15-year capacity bookings with RWE, ConocoPhillips, and Ineos. For more details on this subject, we encourage readers to check our Weekly Newsletter published today.
Germany’s LNG option is the most significant development in the country’s energy sector since Russia’s invasion of Ukraine, given that it has ended Moscow’s dominant role as a gas supplier to Europe’s largest economy.
STORY OF THE DAY
EOA: Israel’s Oil Imports Plunge in April as Kurdish Crude Flows Remain Shut, Kpler’s Data Shows
While there are no signs yet that crude oil flows from northern Iraq are going to resume soon (more on this in the next section), Israel’s overall crude imports have plunged from 375,000 barrels per day (b/d) in March to only 66,000 b/d so far this month, data from Kpler shows. Meanwhile, there has been a draw of around 3 million barrels from Israeli inventories in the past five weeks, according to Homayoun Falakshahi, a senior commodity analyst at Kpler.