Having made the mistake of relying on nice Mr. Putin’s “cheap” natural gas for years, one key reason (perhaps the key reason) that Europe was able to get through the winter of 2022-23 after Russia’s full-scale invasion of Ukraine was a sharp increase in imports of liquified natural gas. Most of this came from the U.S. American exports of LNG to Europe increased by 141 percent between 2021 and 2022. The EU produces about 10 percent of its own gas needs.
LNG is natural gas that has been cooled to a temperature so low that it turns into a liquid. It is compact and can be transported in a tanker, making it useful when pipelines are not feasible or, ahem, have been blown up.
In 2025 58 percent of the EU’s LNG came from the U.S. That accounted for roughly a quarter of all the EU’s gas imports. The largest exporter to the EU was Norway, which accounted for 31 percent, mainly via pipeline. About 7 percent of Europe’s (thus mainly the EU’s) imported LNG in 2025 went through the Strait of Hormuz, mainly from Qatar and the UAE. This represents maybe 4 percent of Europe’s total gas supply, which ought to mean that there is no reason to worry.
Ought.
LNG’s transportability means it can help out Europe but this quality comes with a catch. Europe was not the only part of the world chasing after LNG in 2022, and it is not the only part to do so now. LNG transported through the Strait of Hormuz accounted for around 27 percent of Asia’s total LNG imports. Overall, about 90 percent of the LNG transported through the strait goes to Asia, with almost all the rest going to Europe.
Although the picture varies from country to country, Asia is more reliant than Europe on LNG. Japan, South Korea, and Taiwan depend almost entirely on LNG for their gas needs. Although global capacity has been expected to increase, including in Australia, a handy “local” supplier to Asia, not much more can be expected this year. Making matters worse, Iranian missile and drone strikes knocked out around 17 percent of Qatar’s capacity earlier this year. Even if Qatar is spared additional damage on its facilities, the damage that has been done will take several years to put right. As a result, Qatar has declared force majeure on some of its long-term contracts.
Europe is more exposed than Asia to fluctuations in price. More of its LNG is bought at the spot rate. Moreover, most U.S. LNG is sold on a free-on-board basis. Buyers take ownership at the export terminal and can sell the LNG where they want, meaning that European buyers can be outbid by their Asian peers, something that has already happened this year. One indicator to watch is if the JKM (Japan-Korea Marker, the Asian spot LNG benchmark) is trading sufficiently higher than the Europe’s TTF benchmark to cover the extra shipping costs to the Far East (roughly $1.0–1.5+/MMBtu). The bottom line? Shortages in Asia affect prices in Europe. The TTF price has roughly doubled this year, although it is still far below the levels it reached in the months after the Russian invasion of Ukraine.
Making matters worse for Europe is that its LNG storage tanks are only about 50 percent full, a very low level at a time when it needs to be preparing for winter. Wood Mackenzie, an energy consultancy, is forecasting that they will only be 75 percent full when winter begins, compared with a five-year average of 90 percent. Goldman Sachs is also warning that Europe may be cutting it fine. In the event of an average winter, its storage facilities will probably only be about a quarter full by late March. That is almost certain to mean higher prices ahead, which will likely further sour the continent’s economic and political outlook. Meanwhile, climatists are using higher prices as an argument to press even harder with renewables. But whatever the merits of that approach (count me generally unconvinced), not enough additional capacity can be added to make much difference this winter.