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John Kemp, Commodities & Energy Columnist

Welcome to Power Up. Just two years after Russia’s invasion of Ukraine triggered a crisis, the world is awash with natural gas, with swollen stocks in North America, Europe and Asia weighing on prices and forcing U.S. shale producers to scale back drilling. Elsewhere, Russia’s dark fleet is in trouble, de-flagged by Liberia and the Marshall Islands, as the U.S. Treasury steps up sanctions enforcement.  

Today’s top headlines:

• Russia’s dark fleet shifts from Liberia and Marshall Islands flags

• Saudi Aramco and ADNOC explore investments in U.S. LNG projects

• OPEC expects to win back some of its share of India’s crude imports 

• Nickel producers fear Indonesia’s fast-growing market dominance 

The Astora natural gas depot, the largest natural gas storage in Western Europe, in Rehden, Germany. REUTERS/Fabian Bimmer

After two years of turmoil, Europe’s energy crisis is over. Fears about a natural gas shortage in 2022 after Russia’s invasion of Ukraine have been transformed into a glut and worries about where to store all the extra gas in 2024.  

Regional storage facilities are 62% full compared with an average of 41% at this time of year between 2011 and 2020. As a result, futures prices have fallen 90% from their peak in August 2022 and are close to the 2011-2020 average once inflation is taken into account.  

EU and UK gas inventories are on track to end the winter at a record 664 terawatt-hours, nearly double the pre-crisis average. With Northwest Europe already 80% of the way through the heating season any cold snaps in the next few weeks are unlikely to make a significant difference.  

Europe has been lucky as well as smart. High prices and government policies to reduce gas and electricity use have played a role, but the region has mainly benefited from two exceptionally warm winters in a row. 

Winter 2023/24 has been mostly windy and mild, dominated by strong westerly winds from the Atlantic, rather than still and cold. Heating demand has been much lower than usual and wind generation has soared, creating a double saving of gas.

Since October, prices have been falling steadily to encourage more consumption, limit further accumulation of surplus stocks and prevent storage space running out this summer.  

Lower prices should restart some major gas-using factories idled in 2022 and 2023. It will take longer for wholesale prices to filter through to retail level, but utility bills should eventually come down, easing some of the cost-of-living pressure on households and businesses before next winter.  

Plastic letters arranged to read “Sanctions” are placed in front the flag colors of U.S. and Russia. REUTERS/Dado Ruvic

Liberia and the Marshall Islands have started to remove Russian-owned tankers from their flag registries after stepped-up sanctions enforcement by the U.S. Treasury, threatening operations of the “dark fleet” moving oil to India and China.  

Furnas hydroelectric dam in Sao Jose da Barra, Minas Gerais state, Brazil. REUTERS/Washington Alves

Brazil’s electricity producers want to build more hydroelectric dams to meet growing demand and provide a back-up to surging solar and wind generation, but the plans are fuelling land conflicts with indigenous groups.  

 Adriatic liquefied natural gas (LNG) terminal off Venice. REUTERS/File photo

Italy’s reliance on gas-fired generation has left the country with the most expensive wholesale prices of any major country in the EU and reflects its failure to build more big solar projects in a densely populated landscape with lots of sensitive cultural sites.  

India’s government has ordered electricity generators to continue importing at least 6% of their coal requirements to relieve pressure on the rail network even as domestic production climbs to a record high. 

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