US LNG exports surged to the second-highest level in history in October, with Europe accounting for 60% of demand

US liquefied natural gas (LNG) exports rebounded strongly in October, reflecting the ongoing reshaping of the global energy landscape and cementing the US's market position as the world’s leading LNG exporter.

According to data provider LSEG, US LNG exports reached 7.92 million tons in October, the second-highest monthly level on record, only slightly below the all-time record of 8.01 million tons set in April of this year, and a significant increase from September’s 7.12 million tons.

Europe continued to expand its purchases of US LNG, with its share rising by 8 percentage points from the previous month to reach 60%.

The rebound in export volume was mainly driven by increased output from Cheniere Energy and Venture Global LNG, which more than offset production losses at the Berkshire Hathaway Energy-owned Cove Point liquefaction terminal caused by 12 days of routine maintenance.

Meanwhile, Asian LNG benchmark prices have surged by 70% since early August, but market institutions expect that if winter temperatures in the Northern Hemisphere are normal, high global inventories and weakening demand could gradually put downward pressure on prices.

Europe continued to dominate US LNG flows in October, accounting for 60% of all exports, an 8 percentage point increase from September. Russia’s reduction of pipeline supplies and European countries’ efforts to boycott Russian energy exports are the fundamental drivers behind Europe’s ongoing ramp-up of US LNG purchases.

In contrast, the share of Asian buyers fell from 30% in September to 20% in October, while Latin America’s share also narrowed from 8% in September to 5%.

According to a recent report by consultancy Rystad Energy, European underground gas storage facilities are nearly full, and some Asian LNG buyers have “recently shown signs of insufficient willingness to purchase.”

Asian LNG benchmark prices have risen by 70% since early August. According to Morgan Stanley analysis, the current price surge is due to multiple supply-side disruptions, including maintenance at Norwegian gas fields and labor disputes in Australia.

However, Morgan Stanley expects that if winter temperatures in the Northern Hemisphere are normal, the combination of high global inventories and weakening demand will gradually exert downward pressure on prices.

The momentum behind US LNG export growth is supported by robust medium-term fundamentals. Data from the US Energy Information Administration show that the US has surpassed Qatar and Australia in the first half of this year to become the world’s largest LNG exporter.

Two planned export projects in Louisiana have a combined planned capacity of 38 million tons per year and are scheduled to start production next year. LNG shipping and brokerage company Poten & Partners said on Tuesday that the global trend of capacity expansion will continue, with projects under construction in the US, Mexico, and Canada totaling a potential capacity of 100 million tons per year.