FX.co ★ Europe faces potential energy shock as Russian gas supplies wane

Europe's energy sector is enduring a prolonged period of difficulty, with no immediate resolution in sight. The situation has become more precarious as the European Union's energy regulator warned that the bloc remains dependent on imports of Russian liquefied natural gas (LNG). Experts believe that a complete cessation of these imports could lead to a significant energy shock for European nations. Many EU officials argue that the reduction of Russian LNG imports should occur gradually. They caution against hasty actions in this sensitive area. Additionally, the energy regulator highlighted the challenge EU countries face in balancing energy security with the goal of weakening Russia's financial position by reducing LNG purchases. Recent reports indicate that the export of pipeline gas from Russia to European countries has peaked in the last six months, marking a significant increase over the same period in 2023. In February 2024, France became the largest buyer of Russian LNG, surpassing other foreign nations with purchases amounting to €322.3 million. As pipeline gas supplies dwindle, Russia is ramping up its LNG production. The country aims to increase its LNG output to 100 million tons by 2030, which would account for one-fifth of the world's gas production. According to Deputy Prime Minister Alexander Novak, Russia currently holds an 8% share in global LNG production.