Russia continues to strengthen its role in the European Union’s liquefied natural gas (LNG) market, despite the bloc’s efforts to reduce supplies from Moscow.
Moscow’s share of EU LNG imports rose to 20% in the first half of this year, compared with 14% in the same period last year, according to a report by the Agency for Cooperation of Energy Regulators (ACER).
The growth reflects the energy balance in Europe more than two years after the Kremlin’s war on Ukraine sparked an unprecedented supply crisis. Although Russia is no longer the EU’s main gas supplier, with most pipelines shut down or cut, Russian LNG still plays a pivotal role in securing Europe’s energy needs.
In the third quarter, the EU’s total imports of the super-cooled fuel fell to their lowest levels since 2021, suggesting that Russia’s growing share comes amid a shrinking market. The share of LNG coming from the United States stabilized at around 45% during this period, while Qatar’s share fell to 12%, according to the report.
Qatari LNG exports to Asian markets also declined, as tankers avoided the Red Sea due to Houthi attacks on commercial vessels. This shift in trade flows has opened the door to increased Russian gas flows to the European market.
The European Union is currently seeking ways to reduce its dependence on Russian gas, even as supplies continue to flow to the region. A gas transit agreement via Ukraine is expected to expire by the end of this year, prompting officials to look for alternatives to these supplies. Earlier this year, the bloc agreed to impose limited sanctions on Russian LNG for the first time.
France and Belgium, two countries whose ports still receive significant quantities of Russian fuel, have called for tighter controls on these supplies. However, the European Commission, the bloc’s executive body, has yet to come up with a clear plan to accelerate the phase-out of dependence on Russian gas.
Gas demand in the European Union continued to decline in the first eight months of the year compared to 2023, according to the Energy Regulators Cooperation Agency’s 2024 Market Watch report. Lower gas consumption in the power sector helped offset a slight increase in industrial demand. The EU’s share of the global LNG import market fell to 18% in the third quarter from 24% a year earlier. The report noted that the gas market in Europe is relatively balanced, with buyers in the region avoiding competing for higher-priced spot cargoes.
