U.S. LNG exports are at record highs, with a 40% surge expected in November due to strong European demand. However, higher prices are cutting into exporters’ profits. European energy companies are accusing Venture Global of making billions on the spot market, leading to a 30% drop in pipeline gas imports and increased reliance on LNG, despite the higher costs.

The EU’s economy has struggled in part due to higher energy costs from transition-related taxes and the switch to LNG. Increased domestic demand and Big Tech’s energy needs are driving up LNG prices, with Henry Hub prices exceeding $5 per mmBtu. Europe remains reliant on U.S. LNG due to skepticism of long-term contracts and commitments to buy U.S. energy commodities.

The price gap between Henry Hub and Europe’s TTF gas prices has narrowed to $4.70 per mmBtu, eroding LNG sellers’ profits. U.S. energy companies are expanding LNG export capacity, adding pressure on margins. U.S. electricity demand from data centers could reach 106 GW by 2035, further driving up gas prices due to reliance on gas-fired power plants for reliability.

Despite record LNG imports from the EU, the bloc has agreed to a total ban on Russian energy imports, including LNG. New LNG export capacity in the U.S. will increase gas demand, with expectations for LNG’s share of total gas demand to rise to 20% by 2030. U.S. LNG margins have normalized, and the industry must adapt to this new reality.

Read more at Yahoo Finance: Europe’s Soft Gas Prices Put the Squeeze on U.S. LNG Traders