Europe's LNG Shortage Looms as Global Fight Heats Up
Europe's energy strategy is facing a reckoning as the global fight for liquefied natural gas (LNG) intensifies. Governments and energy companies had delayed rebuilding stockpiles until the Strait of Hormuz reopened, but the jump in gas prices following the start of the Iran war in late February made it hard to justify purchases.
The Strait of Hormuz is a critical conduit for a fifth of LNG supply, and traders had bet that diplomacy would eventually prevail and flows through the strait would resume. However, with gas prices soaring, governments and energy companies are now scrambling to secure alternative supplies.
According to Bloomberg AIS takeaways, Europe's stockpiles of gas have hit their lowest levels since 2022. The delay in rebuilding these stockpiles has left Europe vulnerable to a potential shortage this winter, as the global fight for LNG brews.