Increase in Premiums for 2025 LNG Contracts Following Trump’s Victory

Increase in Premiums for 2025 LNG Contracts Following Trump’s Victory

Share:

The impact of Donald Trump’s victory in the U.S. presidential election is particularly evident in the LNG (liquefied natural gas) contracts for 2025. The premiums for Cal-2025 contracts for the European TTF (Title Transfer Facility) benchmark gas reached a year-high of 7.65 EUR/MWh on November 11, 2024, before slightly decreasing to 7.22 EUR/MWh on November 12. This sharp increase in premiums for 2025 contracts over 2026 is due to several factors, including uncertainty over Trump’s future policies, concerns about supply security, and delays in liquefaction projects.

Factors Influencing the Increase in Premiums

The increase in premiums can be attributed to several key factors. First, the market anticipates strong near-term demand, fueled by geopolitical uncertainties, including U.S. tariffs—especially on China—and potential protectionist policies from the Trump administration. These uncertainties weigh heavily on market stability, and market participants are seeking to protect themselves against heightened volatility, thus driving up premiums for 2025 contracts.

Second, delays in major liquefaction projects like the Golden Pass project in the United States, initially expected for 2024 but now delayed to 2025 or even 2026, contribute to supply tensions for LNG in 2025. Analysts believe these delays could push prices higher for this contract period.

Uncertainty Regarding Gas Transit Through Ukraine

Another source of uncertainty affecting the market is the situation surrounding gas transit through Ukraine, which is expected to see its contract expire at the end of 2024. Speculation about a new transit agreement between Ukraine and Azerbaijan further fuels uncertainty about gas supply. The lack of clarity regarding the future of gas flows between these countries directly impacts the pricing of future contracts.

Meanwhile, the expansion of liquefaction capacity in Qatar, with new liquefaction trains being constructed at the QatarEnergy LNG project at Ras Laffan, which is expected to be commercially operational in 2026, is likely to ease the supply situation by 2026. However, expectations for LNG demand, particularly from countries like Brazil and Egypt, continue to keep upward pressure on prices for 2025.

The Price Trend for 2025

The rise in premiums for 2025 also reflects strong expected demand, with countries like Brazil and Egypt actively seeking to secure LNG on the international market. These nations, facing declining hydroelectric reserves and decreasing domestic natural gas production, find themselves needing to buy more LNG, further contributing to upward pressure on 2025 contract prices.

Spire announces the acquisition of Piedmont’s natural gas distribution business in Tennessee for $2.48bn, extending its presence to over 200,000 customers and consolidating its position in the southeastern US gas market.
The state-owned oil company adjusts its rates amid falling oil prices and real appreciation, offering up to $132 million in savings to distributors.
The launch of the Dongfang 1-1 13-3 project by CNOOC Limited marks a milestone in offshore gas development in China, bringing new investments in infrastructure and regional production.
Woodside Energy will operate the Bass Strait gas assets following an agreement with ExxonMobil, strengthening its position in the Australian market while maintaining continuity of domestic supply.
The EU-US agreement could create a higher energy concentration than that of Russia before 2022, threatening the European diversification strategy.
Al Shola Gas strengthens its position in Dubai with major liquefied petroleum gas supply and maintenance contracts, exceeding $517,000, covering several large-scale residential and commercial sites.
BW Energy and NAMCOR E&P announce the engagement of the Deepsea Mira rig for drilling the Kharas appraisal well on the Kudu field, offshore Namibia, with a campaign scheduled for the second half of 2025.
The Permian Basin has seen a drop of over 50% in methane emissions intensity over two years, according to S&P Global Commodity Insights, illustrating the impact of advanced technologies and enhanced operational management.
Naftogaz and the State Oil Company of the Republic of Azerbaijan (SOCAR) have formalised an initial contract for natural gas delivery via the Transbalkan corridor, opening new logistical perspectives for Ukraine’s energy supply.
Equinor postpones the restart of its Hammerfest LNG terminal by five days, a key site for European liquefied natural gas supply.
Mozambique aims to strengthen the presence of Russian companies in natural gas exploration and production as the country looks to diversify its partnerships in the natural resources sector.
The International Energy Agency anticipates an acceleration in global liquefied natural gas trade, driven by major new projects in North America, while demand in Asia remains weak.
Spanish group Naturgy reports an unprecedented net profit, driven by rising electricity prices and increased use of its gas-fired power plants since the major Iberian grid outage.
The Hague court has authorised the release of Gazprom’s shares in Wintershall Noordzee, following a judicial decision after several months of legal proceedings involving Ukrainian companies.
SSE plc invests up to €300mn ($326mn) in a new 170MW power plant in County Meath, aiming to ensure energy security and support the growing demand on Ireland's power grid.
CMA CGM and TotalEnergies announce a strategic partnership with the creation of a joint venture to operate a liquefied natural gas (LNG) bunkering vessel with a capacity of 20,000 m³, based in Rotterdam.
The amount of gas flared globally surged to 151 billion cubic meters, the highest level in nearly twenty years, resulting in losses estimated at 63 billion USD and raising concerns for energy security.
Since early April, Europe has imported nearly 45 billion cubic meters (bcm) of liquefied natural gas (LNG), with storage prospects for winter putting pressure on gas prices.
The Sharjah Electricity, Water and Gas Authority has completed a natural gas network in Al Hamriyah, spanning over 89 kilometres at a total cost of $3.81mn.
The European ban on fuels refined from Russian crude is reshaping import flows, adding pressure to already low inventories and triggering an immediate diesel price rally.