BAKU, Azerbaijan, July 24. According to a recent analysis by the Oxford Institute for Energy Studies (OIES), European LNG imports continued their downward trend in Q2 2024, decreasing by 10.8 Bcm (26 percent) year-on-year, Trend reports.
This decline highlights LNG's role as Europe's marginal supply source, given limited short-term potential from pipeline imports and domestic production, alongside reduced European gas consumption and net storage injections.
The decrease in European LNG demand did not ease global market pressures enough to return prices to early February levels. This was due to a slight global supply decline and growing non-European LNG demand.
In the JKTS+HK region (Japan, South Korea, Taiwan, Singapore, and Hong Kong), Q2 2024 saw a 4.5 Bcm (11 percent) year-on-year increase in LNG imports, reversing the decline from winter 2023/24. Concurrently, LNG imports in China, South Asia (India, Pakistan, Bangladesh), and Southeast Asia (Philippines, Thailand, Vietnam) continued to rise. Even Indonesia and Malaysia, both LNG exporters, saw higher year-on-year imports through Q2 2024.
The sustained demand growth in China, South Asia, and Southeast Asia, coupled with increased imports into JKTS+HK, has tightened the global market, driving a price rally from February to June in both European and Asian benchmarks. Looking forward, OIES anticipates limited supply growth prospects for the rest of 2024. If robust non-European demand persists, LNG availability to Europe may remain flat or slightly lower year-on-year in 2024. This could impact European storage replenishment in summer 2024 and withdrawal in winter 2024/25, depending on European demand levels.
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