"US Discusses Gas Supply Stabilization Measures with Allies... Preparing for Russia's Invasion of Ukraine"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] The U.S. Department of State is reportedly discussing measures to stabilize natural gas supply and demand with its allies in preparation for the possibility of a Russian invasion of Ukraine. If Russia actually invades Ukraine and the U.S. imposes sanctions on Russia, not only Europe?which depends on Russia for more than 40% of its gas demand?but the entire world could face an energy crisis. In response, the U.S. is also encouraging domestic liquefied natural gas (LNG) producers to increase their export volumes.

On the 23rd (local time), CNN cited senior U.S. government officials saying, "Over the past 6 to 8 weeks, the U.S. Department of State has been discussing ways to increase gas supply and stabilize gas supply and demand in emergencies with major natural gas producing countries and allies."

The officials stated, "The current discussions on gas supply stabilization have reached a fairly advanced stage, and the plan aims to reassure European allies that sanctions on Russia will not severely damage the European economy."

CNN reported that the U.S. Department of State is cooperating with major natural gas producing countries such as Qatar, Australia, and Norway, and is also seeking cooperation from the Netherlands and Italy, which have large gas storage facilities in Europe, to stabilize gas supply.

Additionally, the U.S. is encouraging domestic natural gas producers to significantly increase exports. According to data compiled last month by the U.S. Energy Information Administration (EIA), U.S. LNG exports reached 7.7 million tons, surpassing Qatar (7.2 million tons), the previous top exporter, and Australia (7 million tons), which was second, to become the number one exporter.

The reason the U.S. government is encouraging increased domestic and international gas production is analyzed to be due to the escalating military tensions between Russia and Ukraine.