It was stated that the rise in energy prices in Europe due to the threat of strikes by Australian liquefied natural gas (LNG) producers demonstrates the fragility of the European energy market. Finance Times Meg O’Neill, CEO of Woodside Energy Group.
According to him, the market reaction to possible restrictions on LNG supplies from Australia “contradicts common sense.”
Earlier, workers at Australian companies Chevron and Woodside Energy Group voted in favor of strikes at three major LNG plants. They can start as early as September 2nd.
The union demands higher wages, job security and better working conditions.
O’Neill said Woodside Energy Group is making an effort to reach an agreement with employees. News of the possible strikes by Australian LNG producers caused a sharp rise in gas prices in Europe. They jumped 40% in a week.
According to experts, limiting the supply from Australia could deprive the world market of up to 10% of exported LNG. Australia is the world’s third largest LNG exporter after Qatar and the USA. Its share in the world market reaches 21%. The main buyers of Australian LNG are Japan, China and South Korea.
According to Credit Suisse, the situation shows that the global energy market is critically dependent on supplies from Australia. Expert Leonid Khazanov registeredThat the restriction of Australian LNG will not only affect Asia, but also Europe, which depends on its imports.
Against the background of relatively low prices in Europe, part of the supply is already flowing to Asia, where they are ready to pay more. According to Goldman Sachs, the shortage of LNG will drive up prices in both Asia and Europe.
Deprived of Russian pipeline gas, the EU found itself heavily dependent on LNG imports. This makes it vulnerable to any price fluctuations and supply constraints.
According to analysts, restrictions on exports from Australia could push prices in Europe up to $1,000 per 1,000 cubic meters by winter. The expert believes that the alternative in the form of gas from Africa is still unrealistic due to the underdeveloped infrastructure and political instability in the region.
Thus, the threat of limiting LNG supply from Australia revealed the fragility of the European energy market, which lost its stable supply from Russia.
Gas price in the stock market in Europe the previous day rose Up to $480 per 1,000 cubic meters
Previously recognizedhow long oil will remain as the main source of world energy.