- The record-breaking freight rates for carriers of liquefied natural gases have reached $397,500 per day.
- European countries have begun stockpiling gas supplies in preparation for Russia’s winter.
- Moscow caused an energy crisis by cutting off key pipelines and thereby fueling the continent’s energy shortage.
As Europe struggles to secure winter energy supplies, the freight rates of ships transporting liquefied natural gases hit an all-time record Tuesday.
According to data from, it costs $397,500 to charter an LNG vessel in the Atlantic basin. Spark Commodities. These vessels can store and transport LNG via sea to a coastal location. When heated, the gas is regenerated and then it is pumped to buyers..
Since Russia invaded Ukraine in February, carrier rates have skyrocketed. The average cost to charter a ship for a single day has risen from $13,300 to just below $400,000 during that time.
The Ukraine war left Europe without enough energy and LNG demand rose by 65% in August 2018 compared to 2021. This is according to the International Energy Agency.
Most of these ships are seaborne. According to Refinitiv data, more than 70% of the gas imports to Europe came from the USA in the year ended September.
Moscow has stopped gas deliveries to Europe. Germany and other European countries are heavily dependent upon Moscow’s energy exports. Gazprom, a Kremlin-controlled corporation, has stopped all gas delivery via the Nord Stream 1 key pipeline since August. Other pipelines have been shut down repeatedly.
Some European countries accuse Russia of deliberately sabotaging their pipelines. Nord Stream 2 had leaks last month.
This has seen seaborne LNG take off with European buyers. Germany has chartered five tankers for special purposesso it can pump gas onshore for its first time.
Vladimir Putin’s gas blackmail is failingJeffrey Sonnenfeld, Yale professor, said that the LNG revolution is helping Europe end its dependence upon Russia. Countries there have already secured enough alternative sources to compensate for missing Russian deliveries, as they Asia’s top competitors outbidAnd elsewhere.
Continue reading: These photos show the huge floating gas terminals that could solve Europe’s energy crisis.
