The US’s stance on Nord Stream II is taunting. On the surface, it is claiming that the pipeline will increase Europe’s detrimental reliance on Russian gas, however, in reality, the US wants to secure a greater market share for its LNG in one of the world’s biggest gas markets. Meanwhile, Russia, by restraining gas supplies to gain greater support for Nord Stream II, may, in fact, be doing the US a favour by making American LNG more competitive.
Driven by private producers, US LNG will divert where gas prices are higher. This was one of the main reasons behind the current high prices in Europe, as US LNG cargoes were absorbed by the Asian market.
In Europe, additional supplies may reach the market and help to alleviate the burden of higher prices, but the weather remains the big unknown. A very cold winter will only spell trouble, even if for a short period. Meanwhile, some European power plants are switching back to coal, thereby reversing some of the gains the continent has made with respect to carbon emissions’ reductions.