European natural gas futures fell below €49 per megawatt-hour as liquefied natural gas (LNG) tankers rerouted to Europe, capitalizing on profit opportunities created by supply shortages due to halted Russian pipeline flows through Ukraine.
TTF prices ease as LNG tankers reroute to Europe
Data from ICIS revealed that at least seven US LNG shipments, originally destined for Asia or Colombia, abruptly changed course to European ports, with some vessels making significant course reversals.
Europe's gas storage levels are being depleted rapidly, currently at 59% capacity—15 percentage points below the same time last year. The combination of colder weather and the expiration of Ukraine’s transit agreement is adding upward pressure to gas prices. For LNG traders, the European market has become far more lucrative, with each diverted cargo potentially earning up to $5.3 million more than in Asia, where gas demand and prices remain subdued.
Caution from IEA
The International Energy Agency (IEA) cautioned that while there is no immediate threat to the European Union's gas supply, the sharp reduction in Russian flows could force Europe to rely increasingly on LNG imports. This dependency risks tightening global markets, particularly as Europe faces elevated summer restocking costs in 2025. As these dynamics unfold, the global LNG market may experience increased volatility, with traders navigating the challenges of meeting both European demand and broader international supply constraints.
