US LNG Imports to EU Drop as Price Gap Widens, Threatening Trade Deal

European imports of US liquefied natural gas (LNG) dropped sharply in June as American cargoes became too expensive relative to other suppliers, threatening the viability of the newly implemented EU-US trade deal.

The European Union has been the largest regional buyer of US LNG for two years, driven by sanctions on Russian gas and a ban on Russian LNG purchases starting in 2027. However, last month European buyers shunned American gas due to a widening price gap. US LNG prices rose amid strong domestic demand and higher feedgas costs, while European benchmark prices softened on ample storage and weaker industrial consumption. This divergence made US cargoes uncompetitive, leading to a significant drop in imports.

For energy traders, the shift in LNG flows has immediate price implications. The spread between US Henry Hub and European TTF benchmarks widened, signaling a loss of US price competitiveness. Traders can monitor these real-time price moves on NowPrice's live fuel dashboard to track shifting arbitrage opportunities. The decline also raises questions about US LNG export economics, as European buyers may increasingly turn to Qatar, Nigeria, or other suppliers. If the trend persists, it could pressure US LNG producers to lower prices or risk losing market share in their most important export market.

Looking ahead, the key data points to watch are weekly US LNG export volumes from the Energy Information Administration and European gas storage levels from Gas Infrastructure Europe. The EU-US trade deal, which took effect in July, includes provisions for energy cooperation, but the price disconnect undermines its immediate benefits. If US LNG remains uncompetitive through the summer, the Biden administration may face pressure to address export costs or risk a diplomatic rift with Brussels. The next few months will test whether the trade deal can deliver the promised energy security or if market forces will override political agreements.