Shortage of European energy panics Asia and struggles to purchase fuel

The European energy crisis is causing panic among Asian fuel buyers, forcing importers from Japan to India to pay exorbitant prices for supplies.

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Shortage of European energy panics Asia and struggles to purchase fuel

The European energy crisis is causing panic among Asian fuel buyers, forcing importers from Japan to India to pay exorbitant prices for supplies.

Concerned that Europe’s exorbitant natural gas prices will spill over, LNG traders in Asia are paying record prices for this time of year. In order to compete with the United Kingdom and Spain, buyers in China and Pakistan have raised the prices of gas, coal, propane, and fuel oil. With the weather turning colder and energy shortages around the world, the race for gasoline is unlikely to end anytime soon. The global price surge is projected to continue this winter as demand in the northern hemisphere peaks, driving inflation and jeopardizing the fragile economic recovery.

This is most evident in the liquefied natural gas industry. According to dealers with knowledge of the situation, Japan’s Tohoku Electric Power Co. and Gail India Ltd. both purchased LNG shipments for November and December delivery on Wednesday at prices that are among the highest ever for this time of year.

The purchases were prompted, at least in part, by this week’s surge in European gas prices, which fueled expectations that the rally might spread to Asian LNG spot rates, which are already at a seasonal high, according to traders who requested anonymity to discuss private specifics. Due to wild price fluctuations, LNG trading activity in the Pacific has slowed in recent weeks, but the danger of further European gains may encourage more Asian importers to return to the spot market. Instead, Asian end-users have chosen to raise supplies through cheaper long-term contracts linked to oil or to suspend spot buying entirely in the hope that prices will eventually fall, which they have not.

Business Standard

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Shortage of European energy panics Asia and struggles to purchase fuel
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The European energy crisis is causing panic among Asian fuel buyers, forcing importers from Japan to India to pay exorbitant prices for supplies.
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THE POLICY TIMES
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