European energy companies have become the accidental beneficiaries of the U.S.-China trade war, snapping up discounted American LNG cargoes rejected by Chinese buyers at prices 30% below 2023 levels. The buying spree has pushed EU gas storage to 94% capacity in July – months ahead of schedule and nearing the bloc’s 95% winter preparedness target.
Market Mechanics:
- Price Arbitrage: Asian LNG at 7.50 vs. Europe′s 6.20 makes diversions profitable
- Infrastructure Boom: EU added 18 new regasification terminals since 2022
- Storage Economics: Traders locking in $3.50 winter-summer spread
Notable Deals:
- Shell purchased 6 diverted Cheniere cargoes at $6.00/MMBtu
- TotalEnergies leasing floating storage off Spain
- Uniper reselling excess volumes to Turkey at $6.80
“This is a geopolitical gift for Europe,” said Bruegel analyst Simone Tagliapietra. “These cargoes could save the EU €15 billion in winter energy costs.”
