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Ukraine hopes increased supply of gas from the US and other producers to Europe will make prices more comfortable, President Volodymyr Zelenskiy said in a Telegram post yesterday.
Russia’s invasion of its neighbour in February 2022 sparked an energy crisis in Europe that led to a jump in regional benchmarks and international liquefied natural gas (LNG) prices.
“This is going to further tighten the LNG market,” Scott Darling, a managing director at Haitong International Securities, said on Bloomberg TV today.
“Supply, particularly for LNG, is tight, and we see more upside risk to spot LNG prices this year and next,” Darling said.
Gas flows from Russia to Europe via Ukraine halted yesterday, bringing to an end more than five decades of the key conduit for the region.
While the move was expected after months of political wrangling, Europe will still have to replace about 5% of its gas and may rely more heavily on storage, which has fallen below average levels for the time of year.
Prices rose in anticipation of the cut-off, with Europe’s gas benchmark closing 2024 up more than 50%.
Those gains haven’t yet been fully reflected in the cost of the normally more-expensive LNG that nations including Japan and South Korea are heavily reliant on.
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