Europe pulls US LNG from Asia as prices spike

Goldman Sachs analysts expect European gas will need to trade 40% above current levels to keep cargoes arriving through winter.

European gas storage sits at its lowest level for this time of year since 2011, drained across a summer in which Asian buyers outbid European ones for cargoes of American fuel.¹ Refilling it before winter means outbidding those same buyers, and the price of doing so is now the central question in the global gas market.

Prices in Europe reached their highest point in three years this week.¹ Over the past two weeks they climbed far enough to redirect trade, sending more US liquefied natural gas tankers to European terminals than to Asian ones, Semafor's Tim McDonnell wrote in a column published August 27.¹ That reversal settles nothing. To hold its purchasing edge through the winter, EU gas prices will likely need to trade 40% above current levels, Goldman Sachs analysts wrote this week, a level more than double the prewar forecast.¹ Primary could not independently verify the estimate.

The squeeze starts in the Persian Gulf. Liquefied natural gas exports from Qatar, which before the war accounted for one-fifth of global supply, remain near rock bottom, even as the volume of crude oil leaving the Gulf has ticked moderately higher.¹ Gas has not followed oil back into the market, and the shortfall has been large enough to revive a pattern Europe knows well from the past half-decade. Global gas runs undersupplied, US LNG rushes in to fill the gap, and Europe and Asia bid against each other for a limited number of cargoes.¹

Until recently Asia was winning that auction. Deliveries there commanded a significant premium over cargoes landed in Europe, which pulled supply east and left European inventories where they now sit.¹ McDonnell described the current stretch as a test of how much the continent has learned from half a decade of successive energy shocks.¹

What Europe changed after 2022

A three-year price high sounds punishing for European households and factories. McDonnell wrote that it should bite less than it once did. Since the gas crisis triggered by Russia's 2022 invasion of Ukraine, renewables adoption and efficiency gains have left the EU economy using significantly less gas for each unit of GDP it produces than it did a few years ago, so the same price spike passes through a smaller share of economic activity.¹ The gain is structural rather than seasonal, which is why the column treated a three-year high as a different event from the 2022 shock.

Weather may help at the margin as well. Warm conditions brought on by this year's strong El Niño should hold heating demand down, according to the column.¹ Neither the efficiency gains nor the forecast changes the arithmetic of storage, which has to be filled with cargoes bought at whatever price wins them.

The warning underneath the price

For US exporters the immediate arithmetic is favorable. Undersupplied markets, rising European prices and two regions competing for the same tankers add up to a short-term win.¹ The warning in the column is that the win carries a cost that shows up somewhere else.

Emerging economies watching Europe's experience are "losing trust" in LNG as a reliable energy source, TotalEnergies chief executive Patrick Pouyanné cautioned this week.¹ McDonnell flagged that as a major concern for Pouyanné's shareholders, whose company is the top US exporter.¹

Where that mistrust leads matters beyond the gas market. Europe's answer to expensive imports has been to move faster onto renewables, an option that is not equally available everywhere. For many Asian countries, McDonnell wrote, the most likely alternative to costly LNG is to fall back on coal.¹

Reporting note: this piece is based on "View: Europe's warning for US gas exporters," a column by Tim McDonnell published by Semafor on August 27, 2026. No interview was conducted, and the price, storage and forecast figures are as the column reported them.

Source: Semafor, August 27, 2026

References

This article is based on 1 source, listed in the order they are cited.

1. 1 TM Tim McDonnell announcement · 27 Aug 2026 View: Europe’s warning for US gas exporters See the source