Trump lifts ban on LNG exports, European natural gas market welcomes major changes.

President Donald Trump recently lifted the ban on new export licenses for liquefied natural gas (LNG) in the United States, easing long-term uncertainty in global natural gas supply and causing fluctuations in European gas prices. Benchmark futures continued to fluctuate after rising more than 2% in the previous trading day. It is reported that Trump revoked a measure implemented by his predecessor, President Biden, in January 2024, which suspended the approval of new export licenses for US liquefied natural gas. This paves the way for related companies to apply for new licenses. Meanwhile, Trump once again called on the EU to increase procurement of US oil and gas to avoid potential tariff risks. Currently, the US is the largest supplier of liquefied natural gas to Europe. Although the issuance of new export licenses was anticipated in the market, it still helps alleviate some concerns following market turmoil earlier this year. Japanese Minister of Economy, Trade and Industry Hirofumi Yoshimura stated on Tuesday, "This change could have an impact on the global liquefied natural gas market, as the supply and demand structure of the market is already very tight. However, this could increase supply and help stabilize the market." He also pointed out that this move will enhance the predictability of Japan's liquefied natural gas purchases. In Europe, although future projects are expected to benefit from this change, they still face challenges this year. With the loss of Russian pipeline gas that used to flow through Ukraine, Europe needs more liquefied natural gas to meet its demand. The International Energy Agency (IEA) released a report on Tuesday stating that the region's liquefied natural gas imports declined a year ago, but could increase by more than 15% by 2025. The balance of the global natural gas market remains fragile. Since the energy crisis three years ago, Europe has successfully diversified its energy supply, but this year's heating season has once again highlighted the fragility of its energy supply. After experiencing two relatively mild winters, cold weather has accelerated the depletion of natural gas storage, leading to continued high European gas prices and putting immense pressure on consumers. Citigroup predicts in a report that global liquefied natural gas supply will increase by 40% over the next four years (until 2028), which will help Europe resolve most of the issues left by the crisis and potentially halve natural gas prices. As of the time of writing, European benchmark Dutch TTF natural gas futures rose by 0.97% to 48.315 euros per megawatt-hour. It is worth noting that Trump's decision to lift the ban fulfills his campaign promise to overturn the policies of the previous Biden administration. The Biden administration had previously suspended the approval of new export licenses to study the impact of increased US fuel exports on climate, the economy, and national security. A study released last month showed that increased exports could raise natural gas prices for US consumers and increase global emissions, which had been seen as a potential obstacle to the Energy Department's quick approval of permits. Following the lifting of the ban, affected companies such as Venture Global LNG Inc., Energy Transfer LP, and Commonwealth LNG are expected to resume their multi-billion dollar export projects. Trump instructed the Energy Department in his order to consider the economic and employment benefits, as well as the "impact on the safety of allies and partners," when approving new licenses.