US LNG exports to Europe decline as Asia prices surge

For the first time in almost two years, less than half of U.S. liquefied natural gas exports went to Europe in June. Preliminary ship-tracking data from LSEG reveals that stronger prices in Asia and record imports by Egypt diverted cargoes, marking a significant shift in global energy flows.

European buyers, who still need to replenish storage for the next winter, have been holding out for better prices. Asian spot prices averaged $17.33 per million British thermal units (mmBtu) in June, significantly higher than the European TTF benchmark of $13.19 per mmBtu. This price gap encouraged U.S. exporters to redirect shipments eastward.

Egypt emerged as a major buyer, importing a record 1.06 million metric tons (MT) of U.S. LNG in June, representing nearly 10% of total exports. Meanwhile, total U.S. LNG exports saw a slight increase to 10.6 million MT, supported by facilities returning from maintenance. Shipments to Asia reached about 31% of exports, with Latin America also seeing increased imports as buyers sought alternatives to reduced supply from Trinidad and Tobago.

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This backwardation in the forward curve means that traders are holding their ground and are currently purchasing very little gas. The fear of paying too much prevails.