Report: Russia Overtook US as Gas Supplier to Europe in May

A view shows gas wells at Bovanenkovo gas field owned by Gazprom on the Arctic Yamal peninsula, Russia. (File photo: Reuters)
A view shows gas wells at Bovanenkovo gas field owned by Gazprom on the Arctic Yamal peninsula, Russia. (File photo: Reuters)
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Report: Russia Overtook US as Gas Supplier to Europe in May

A view shows gas wells at Bovanenkovo gas field owned by Gazprom on the Arctic Yamal peninsula, Russia. (File photo: Reuters)
A view shows gas wells at Bovanenkovo gas field owned by Gazprom on the Arctic Yamal peninsula, Russia. (File photo: Reuters)

Europe’s gas imports from Russia overtook supplies from the US for the first time in almost two years in May, despite the region’s efforts to wean itself off Russian fossil fuels since the full-scale invasion of Ukraine.

While one-off factors drove the reversal, it highlights the difficulty of further reducing Europe’s dependence on gas from Russia, with several eastern European countries still relying on imports from their neighbor, according to The Financial Times.

“It’s striking to see the market share of Russian gas and [liquefied natural gas] inch higher in Europe after all we have been through, and all the efforts made to decouple and de-risk energy supply,” said Tom Marzec-Manser, head of gas analytics at consultancy ICIS.

Following Russia’s full-scale invasion of Ukraine in February 2022, Moscow slashed its pipeline gas supplies to Europe and the region stepped up imports of LNG, which is shipped on specialized vessels with the US as a major provider.

The US overtook Russia as a supplier of gas to Europe in September 2022, and has since 2023 accounted for about a fifth of the region’s supply.

But last month, Russian-piped gas and LNG shipments accounted for 15 percent of total supply to the EU, UK, Switzerland, Serbia, Bosnia and Herzegovina and North Macedonia, according to data from ICIS.

It also showed that LNG from the US made up 14% of supply to the region, its lowest level since August 2022.

The reversal comes amid a general uptick in European imports of Russian LNG despite several EU countries pushing to impose sanctions on them.

Russia in mid-2022 stopped sending gas through pipelines connecting it to north-west Europe, but continues to provide supplies via pipelines through Ukraine and Türkiye.

Flows in May were affected by one-time factors, including an outage at a major US LNG export facility, while Russia sent more gas through Türkiye ahead of planned maintenance in June.

Demand for gas in Europe also remains relatively weak, with storage levels near record highs for this time of year.

The reversal was “not likely to last”, said Marzec-Manser of ICIS, as Russia would in the summer be able to ship LNG to Asia via its Northern Sea Route.

That was likely to reduce the amount sent to Europe, while US LNG production had picked up again, he said.

“Russia has limited flexibility to hold on to this share [in Europe] as demand [for gas] rises into next winter, whereas overall US LNG production is only growing with yet more new capacity coming to the global market by the end of the year,” he added.

The transit agreement between Ukraine and Russia also comes to an end this year, putting at risk flows through the route.

The European Commission is supporting efforts to establish an investment plan to expand the capacity of pipelines in the Southern Gas Corridor between the EU and Azerbaijan.

A senior EU official said supplies through the route were not currently sufficient to replace the 14bn cubic meters of Russian gas that currently flowed through Ukraine to the EU each year.

The EU’s energy commissioner Kadri Simson said she had raised concerns about LNG being diverted from Europe to meet demand in Asia on a trip to Japan this month.



Transatlantic Airfares Slump as Western Europeans Skip US Travel 

A view of Leonardo da Vinci International Airport in Fiumicino, near Rome, Italy, September 23, 2024. (Reuters) 
A view of Leonardo da Vinci International Airport in Fiumicino, near Rome, Italy, September 23, 2024. (Reuters) 
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Transatlantic Airfares Slump as Western Europeans Skip US Travel 

A view of Leonardo da Vinci International Airport in Fiumicino, near Rome, Italy, September 23, 2024. (Reuters) 
A view of Leonardo da Vinci International Airport in Fiumicino, near Rome, Italy, September 23, 2024. (Reuters) 

Airfares from Europe to the United States have dropped to rates not seen since before the pandemic, as travelers from Western Europe lead a pullback in travel to the US that is expected to continue through at least July.

Overseas arrivals to the United States fell 2.8% in May from a year ago, according to preliminary data from the US National Travel and Tourism Office within the US Department of Commerce.

Travel from Western Europe fell 4.4% in May although travel from Eastern Europe rose 4.6% in the same period.

Forward bookings suggest sustained declines are on the horizon, with total inbound bookings to the US in July down 13% year-over-year, according to OAG Aviation, an analytics firm.

Transatlantic airfare has been declining since the first quarter when Europeans started reconsidering travel to the US after President Donald Trump suggested annexing Greenland, launched a global trade war, and issued orders that focus on stricter border policy. A stronger dollar has also deterred some trips.

In March, travel from Western Europe fell 17% year-over-year, according to the NTTO.

Average round-trip economy airfares for over 50 routes from the US to Europe in the first quarter were down an average of 7% year-over-year, with rates to fly between Atlanta, Georgia, and London, down 55%, according to data from Cirium, an aviation analytics firm.

As American consumers have been bargain-hunting and waiting closer to their departure dates to finalize travel plans, the decline in demand from Europe is another factor contributing to cheaper travel.

"Fewer seats filled by European travelers to the US, and a slower pace of growth in US outbound to Europe than last year, will tend to cast 2025 as a tougher year to make money on transatlantic routes," said Aran Ryan, director of industry studies at Tourism Economics, a subsidiary of Oxford Economics.

This summer, the price of round-trip tickets from the US to Europe is down 10% compared with a year ago, travel booking app Hopper said. Average fares of $817 per ticket are in line with prices to Europe in the summer of 2019 before the pandemic.

Major carriers, including Air France KLM and Germany-based Lufthansa, expect slowing activity.

Lufthansa CEO Carsten Spohr said the company expects weaker demand in the third quarter, while Air France KLM CEO Ben Smith said the company is seeing a "slight pullback" in transatlantic traffic and will slash prices to keep cabins on its transatlantic flights full.

Airlines including Lufthansa and US air carrier United Airlines say higher demand from US travelers flying to Europe is offsetting the decline of Europeans flying the opposite direction.

United said international bookings from Europe fell 6% in the first quarter, but added that US-originating demand made up for the pullback. Rival Delta Air Lines said 80% of its long-haul international demand originates from the US, and fares in the region are "significantly higher" than in the rest of the world.

Lufthansa said it plans to market its transatlantic flights to more Americans given the higher demand, despite travel from Western Europe showing moments of recovery. Travel from the region to the US increased 12.1% in April before falling again in May, according to data from the NTTO.

As of mid-May, there are 4.3% more international flights scheduled to depart from US airports for international destinations this summer, said Hopper.

"We feel really good about the transatlantic market," American Airlines CFO Devon May said at a Wolfe Research transportation and industrials conference in May.