Fear grips EU gas trade
‘War premium’ makes LNG obscenely profitable – and too expensive to burn
Natural gas used to be known as the ‘champagne’ fuel, a luxury energy source that only wealthy nations could afford. Coal, by contrast, was ‘beer’ – the cheap and ubiquitous fuel of the masses. As the world plunges into a full-blown energy crisis that carries a tangible risk of physical supply shortages, liquefied natural gas cargoes are becoming as valuable as original Rembrandt, Cézanne or Munch masterpieces.
It is hard to overstate the insanity going on in energy markets right now. The risk premium that Russia’s invasion added to already-overheated global commodities has created an exceptional money-making opportunity for those participants placed to capture the enormous differentials between energy-producing basins and import-dependent regions.
Nowhere is this more apparent than in natural gas. Sanctions risk is growing by the day, with the UK on Tuesday bannin…