Europe's LNG supply narrows to US and Russia as dependence tops 80%

Europe’s liquefied natural gas market has moved into a markedly concentrated configuration: cargo flows and contracting patterns now channel a large majority of imports to and from two supplier blocs. That consolidation results from trade adjustments, contract rollovers and the relative availability of American capacity and Russian volumes, and it has unfolded over successive market shocks rather than in a single event. In the near term this creates greater predictability of volumes arriving, but strategically it amplifies Europe’s exposure to the incentives and politics of a narrow exporter set. The concentration increases the speed and breadth of price transmission: changes in deliveries or contractual terms from either side quickly pass through wholesale and retail gas markets. Physical constraints — shipping windows, charter availability and terminal turnaround — make it harder for Europe to re-route cargoes or to absorb sudden swings in flows, intensifying short-term volatility. Political developments have turned commercial patterns into policy flashpoints: a diplomatic rift centred on Greenland has prompted EU capitals to revisit their tolerance for single-source exposure and spurred tighter coordination between energy and foreign-policy officials. Industry responses are also emerging: some large buyers are negotiating multi-year deals with Gulf producers to diversify away from U.S.-sourced cargoes, trading some spot-market flexibility for predictability and alternative routing. Those corporate pivots reshape bargaining dynamics, freight and scheduling calculations, and may reduce acute dependence over time if scaled up — though they carry their own geopolitical and logistical trade-offs. For policymakers, the choice is stark: stronger buyer coordination and storage build-outs can ease seasonal pressures, but these levers take time and capital, and they may not prevent politically motivated interruptions. Investors and corporate treasuries will increasingly price supplier concentration into cost of capital, hedging programs and contingency reserves. Over the medium term, expanding storage, floating regasification units, and faster progress on electrification and renewables can lower reliance on concentrated LNG sources, but meaningful change requires multi-year investment and coordinated policy signals. Absent a significant influx of alternative suppliers or accelerated domestic substitutes, Europe faces a period where market mechanics and geopolitics together will determine energy affordability and reliability.