According to industry experts, energy companies and traders are making huge profits selling US natural gas to Europe, with a single shipment earning $200 million of profit.
US exports of natural gas across the Atlantic have increased in the last few years, as companies pounce on the huge earnings on offer while European governments face a Russian supply squeeze.
You aren't talking about a margin. "You're talking about a multipliers, that's what you're talking about," said Segalen, who hosts the Redefining Energy podcasts.
He told Insider that it was insane.
According to Segalen, companies with gas in the US can fill a large ship and send it across the Atlantic for $60 million, with the cargo fetching $275 million in Europe.
Segalen said buyers who locked in deals to purchase US natural gas before European prices went up would make huge profits.
Felix Booth thinks companies could make $150 million on each shipment of natural gas.
At the moment, he said, it's an amazing arbitrage. Anyone holding natural gas in hopes of a price rise has made huge profits.
Large energy companies such as France's TotalEnergies as well as major trading houses such as Trafigura and Gunvor are some of the key players buying and selling USnatural gas.
As supplies run low, the companies are delivering what the continent requires. He said that it wasn't just profiteering. The prices are high.
The price of natural gas in Europe is expected to go up in 2022. It was last month that Russia's Gazprom cut flows through the important Nord Stream 1 line into Germany.
European gas prices have gone up a lot over the last year. The Dutch TTF natural gas futures prices stood at around $62 per metric million British thermal units on Friday.
US natural gas is cheaper due to its plentiful supplies and lower export capacity. After rising sharply in recent months, US Henry Hub natural gas futures traded at $8.70 per million British thermal units Friday.
Major companies are increasing their exports from the US to Europe. Less than half of the US's natural gas exports went to Europe in August. In the same month in 2021, it was just 19%.
In June, the US supplied more gas to Europe than Russia.
Big energy firms have made a lot of money from the surge in energy prices. Gunvor had record profits in the first half of the year. The company's trading arm performed well, with the profit hitting a record.
Segalen and Booth both said they expect US natural gas exports to Europe to continue at the same level as governments scramble to secure supplies of the fossil fuel which is vital for heating and industry.
All Rights Reserved © 2024
