As Europe’s energy crisis and China’s shortages drive up demand for American supplies, the United States has become the world’s biggest exporter of liquefied natural gas. According to ship-tracking data from ICIS LNG Edge, US LNG exports surpassed 7 million tonnes (7.7 million tonnes) in December, narrowly beating out competitor exporters Qatar and Australia for the first time. In just six years, the United States has ascended to become the world’s top exporter, thanks to a shale gas revolution that has expanded domestic output and transformed the country into a formidable force in global energy markets.
According to projections from ICIS and the US Energy Information Agency, the United States will be the world’s largest exporter through 2022. Demand is projected to continue high in Europe, where there are concerns about Russia’s natural gas supply as tensions rise along its border with Ukraine. Gas prices in Europe hit fresh highs in late December as investor confidence in Russian deliveries eroded and debate erupted over the Nord Stream 2 pipeline, which could transport gas directly from Russia to Germany.
The European Union imports around 40% of its natural gas from Russia, with much of it passing through Ukraine. According to Reuters, wholesale prices rose further on Wednesday as the flow of gas in a pipeline from Russia to Europe was reversed for the 16th day in a row. As a result, US LNG producers have increased supplies to Europe, where prices are presently higher than in east Asia.
Prices in both locations are significantly higher than those in the United States, implying that US LNG exports will grow in 2022. For years, the European Union has attempted to reduce its reliance on Russian natural gas. However, a number of EU countries, particularly those in close proximity to Russia, remain virtually entirely reliant on Moscow for gas.