Reuters, citing a US official, said the US is working on a plan to supply Europe with natural gas in the event that Russia cuts off supplies or sanctions make it impossible to supply gas.
- Engaging with LNG suppliers to manage storage and diversion to Europe if necessary
- Working with countries and companies around the world to ensure security of energy supply
- Working with countries and companies from North Africa to Asia to US to identify stockpiles
- Some Asian LNG cargoes have already been diverted
- Europeans ready to join in financial sanctions and export controls
This is an accident waiting to happen. LNG suppliers are already running at full tilt and global gas prices are sky high. If they cut of Russian supplies, there just isn't enough supply out there. The US appears to be hinting at drawing down inventories where they're sufficient, but that will simply create a supply crunch there later and there isn't some surge of LNG coming next year.
If there is a war and they sanction Russian gas, I think there's a great trade in buying gas. At the same time, I can't imagine Germany is willing to risk a sustained rise in gas prices and that would surely be the result.
European benchmark gas:
