Global gas markets are very tight.

European storage levels, while within five-year averages, are much lower than last year. The concern now is that Europe will need to import a lot more gas, particularly LNG, to refill storage. This is keeping gas prices high because there’s a mandate to replenish storage to at least 90% by November 1st. Gas prices are also high due to limited new LNG supply. While there are new projects coming online, such as in the US, Senegal-Mauritania, and Canada later this year, these additions will only incrementally increase global supply. They won’t be enough to meet both European and Asian demand.

Would Germany be willing to return to taking more Russian gas if a ceasefire deal happens?

Germany is importing some Russian LNG, but not directly. Instead, a German company is receiving Russian LNG via French import terminals. Europe has not imposed a full ban on Russian LNG. Some restrictions exist, such as limits on re-exports. The reason is simple: the gas market remains tight, and policymakers have been cautious. Discussions about further restricting Russian LNG have taken place, but there’s a recognition that doing so now could worsen the situation and push prices even higher. European industries have already been vocal about high gas prices hurting competitiveness. Germany resuming imports of Russian pipeline gas is going to be difficult. The Nord Stream 1 pipeline was sabotaged, leaving only one operational line that was never fully utilized. The alternative would be importing gas through Poland, but Poland is not exactly a close ally of Russia. Another potential route would be resuming transit through Ukraine. However, even if a ceasefire is reached, it’s unclear whether large volumes of Russian gas would be allowed to flow through Ukrainian pipelines again.

Will increased US tariff or trade restrictions impact future LNG investment?

This is a critical issue. Many long-term contracts have been signed for example between Chinese companies and US LNG producers, with several projects already well into construction. However, a few projects are still awaiting a final investment decision (FID), and these could be at risk if trade tensions escalate. Additionally, Chinese LNG buyers might rethink their strategy, considering whether to invest in US LNG or look elsewhere to countries that are eager to secure long-term deals. This could pose a risk to the next wave of US LNG expansion.