Gas Prices’ Recent Surge in Europe: All you need to know
Gas prices in Europe have surged due to concerns over possible strikes at a liquefied natural gas (LNG) plant in Australia. The Offshore Alliance union has issued a warning about a potential strike at Australia's North West Shelf facility, scheduled to begin as soon as September 2 if salary negotiations remain unresolved.
Bloomberg reported a roughly 10% increase in benchmark gas prices for the European Union and the United Kingdom on Monday. While gas prices had surged following Russia's incursion into Ukraine, they had subsequently decreased.
Apprehensions revolve around the North West Shelf facility's role in supplying LNG globally as Australia is a prominent supplier. Alongside this facility, Chevron-operated Gorgon and Wheatstone offshore LNG plants are also undergoing strike votes, with outcomes expected on Thursday. These three plants constitute approximately 10% of the global LNG supply.
Ben McWilliams, an associate fellow at Bruegel, a think tank, cautioned that these strikes could have repercussions on worldwide LNG prices.
As a response to Russia's reduction in natural gas supplies during the Ukrainian conflict, countries sought alternative energy sources, with LNG being a prominent choice. Australia, alongside Qatar and the United States, is a major global LNG exporter.
Cornwall Insight, a research firm, has predicted that the uncertainty surrounding Australia's gas supply could lead to significantly higher gas prices and contribute to a substantial rise in Ofgem's price cap by January. It anticipated a rise in the price cap from £1,925.71 in Q4 2023 to £2,082.56 for a typical annual household bill in Q1 2024.
FAQs
Why did gas prices increase in Europe?
Gas prices surged due to concerns about a potential
