New Delhi [India], November 17 (ANI): A new report by the Oxford Institute for Energy Studies warns that the global effort to reduce dependence on Russian gas is generating short-term volatility in energy markets, largely driven by tightening supply conditions and shifting geopolitical alignments. The report states that “reducing dependence on Russian gas means increasing reliance on an increasingly volatile ally in the US.”
According to the study, sanctions on Russian energy have pushed many nations to turn to the United States for LNG supplies. As a result, the US is now poised to dominate global LNG supply growth, with its export capacity expected to nearly double by 2030. This rapid expansion comes amid an already turbulent global LNG market.
The report notes that while a surge in LNG supply later in the decade could ease some risks, immediate volatility is likely to escalate. Natural gas is increasingly being used as backup for intermittent renewable energy sources, and uncertainty around new investments may trigger supply shortages. These constraints could heighten political tensions, particularly if global producers blame European Union policies for adding regulatory and pricing pressures.
The study further cautions that Washington’s aggressive push to secure foreign markets for US LNG—particularly under the Trump administration—may politicize global gas trade and weaken long-term buyer confidence.
In contrast to oil, which has maintained stable demand due to its dominance in transportation, natural gas faces severe competition from renewables in Europe and China, and from coal in India and parts of Asia, making its long-term outlook less predictable.
Adding to these challenges is the US government’s control over global energy trade via the dollar-clearing system, which enables it to impose unilateral or secondary sanctions. The report warns that this capability increases the likelihood of market disruptions and is driving countries such as Russia, China, India, and Iran to expand energy trade using local currencies.
The globalization of gas markets has amplified these risks. Interlinked price benchmarks mean that a supply shock in one region can trigger price spikes across others. Following the Ukraine war, European and Asian gas prices effectively converged, transforming Europe’s energy crisis into Asia’s. This has raised concerns among major Asian consumers, including China and India, about the long-term reliability of LNG for power generation and industrial use. (ANI)
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