• 4 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 7 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 3 hours IMO 2020 could create fierce competition for scarce water resources
  • 39 mins Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 16 hours Old - New Kim: Nuclear Negotiations With U. S. Will Never Resume Unless Washington Changes Its Position
  • 12 hours IMO2020 To scrub or not to scrub
  • 15 hours India After Elections: Economy And Hindu Are The First Modi’s Challenges
  • 2 hours Apartheid Is Still There: Post-apartheid South Africa Is World’s Most Unequal Country
  • 9 hours Theresa May to Step Down
  • 2 hours Total nonsense in climate debate
  • 12 hours Devastating Sanctions: Iran and Venezuela hurting
  • 4 hours IRAN makes threats, rattles sabre . . . . U.S. makes threats, rattles sabre . . . . IRAQ steps up and plays the mediator. THIS ALLOWS BOTH SIDES TO "SAVE FACE". Then serious negotiations start.
  • 227 days Epic Fail as Solar Crashes and Wind Refuses to Blow
  • 14 hours Compensation For A Trade War: Argentina’s Financial Crisis Creates An Opportunity For China
  • 10 hours Level-Headed Analysis of the Future of U.S. Shale Oil Industry
The Threat In Iraq Is Being Overblown

The Threat In Iraq Is Being Overblown

As Iraq has been drawn…

The Single Most Bullish Indicator For Oil

The Single Most Bullish Indicator For Oil

Crude futures saw some headwinds…

Gazprom’s European LNG Market share in Jeopardy, says Fitch

Gazprom HQ

Growing competition from natural gas and LNG exporters, and a decline in gas demand in Europe are threatening the market share of its single-largest supplier, Russian Gazprom, Fitch has warned on Tuesday.

The state-owned giant accounts for about a third of all natural gas supplies to the continent.

According to the ratings agency, the loss in market share – or a decline in profit margin – is pretty much unavoidable, but the degree of its severity will depend on Gazprom’s flexibility. The Russian company has low production and transportation costs on its side, as well as spare production capacity.

One of the measures the company is expected to take to offset the effects of the more intense competition and the sluggish demand (caused by oversupply) is separating the price of natural gas from the price of crude. It is also likely to offer its European clients more attractive trade conditions, which is the most logical thing to do in such an environment.

Among these, Sputnik reports, will be a reduction in the take-or-pay volumes and a removal of clauses requiring a specific destination for gas deliveries, which restricts overall export amounts.

Talk about Gazprom losing market share to the growing number of competitors, the U.S. included in the LNG segment, has been going on for some time. For now, however, the global LNG market remains oversupplied, which is pressuring prices and reducing the lucrative potential of exports to Europe.

Demand is stagnating, especially in the Asia-Pacific region, Fitch noted. The oversupply is seen by the agency to persist until at least 2021, and competition will only get more intense in Europe as suppliers fight for market share. Gazprom’s rivals are no less motivated to offer the best conditions to their clients to take a bite out of the Russia’s giant 33 percent share.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News