EU leaders accuse US natural gas companies of profiteering
21 Nov 2022 17:00:25
Brussels, Nov 21: European leaders are unhappy with natural gas prices. Some leaders are insisting that the EU impose a price cap on all natural gas imports, regardless of origin, – notes Oilprice.com.
France’s president Emmanuel Macron accused the United States of a “double standard” because of the difference between the price at which liquefied natural gas produced in the U.S. sells in Europe and the price at which natural gas sells within the U.S.
“The North American economy is making choices for the sake of attractiveness, which I respect, but they create a double standard,” Macron said, also adding that “they allow state aid going to up to 80% on some sectors while it’s banned here – you get a double standard.” He wasn’t alone among European national leaders in being unhappy about gas prices. In fact, as many as 15 leaders were unhappy, and they insisted that the EU imposes a price cap on all natural gas imports, regardless of origin. Now, the U.S. is striking back at the accusations. “What’s happening is the companies that hold those long-term contracts with US LNG producers, they’re marking that up and earning that margin in the European market,” Brian Crabtree, an assistant secretary at the Department of Energy, – told the Financial Times. “It’s not the US LNG company, it’s basically European-headquartered international oil companies and traders.” Indeed, producers of liquefied natural gas do not invariably sell their product directly to the consumer, in the face of a country in Europe, for instance, They work with commodity majors such as Vitol and Trafigura, or the supermajors, including BP and Shell. This is not to say that LNG producers are not benefiting from the much stronger demand for LNG from Europe. And this is exactly the reason they have been benefiting, in the form of higher profits: demand has surged, and when demand surges, prices follow, especially if supply is not growing as fast as demand. In other words, Europe seems to want businesses to not act as businesses and take every opportunity to make a profit, which is what businesses are all about.
Be that as it may, a Ministry of Energy analyst told the FT that the U.S. was committed to helping Europe get enough gas “at a price that is affordable to the continent.” It’s hardly a surprise he did not go into detail on how this affordable price would be achieved.