LNG imports into Europe reached a 20-month low in July, falling by 7% year over year to 8.6 million tons. This decline was driven by low European benchmark natural gas prices, which have discouraged traders from shipping many cargoes to the continent. The front-month futures at the TTF hub, the benchmark for Europe's gas trading, were at $30.43 (27.71 euros) per megawatt-hour (MWh) as of early July, contributing to the lowest import volumes since November 2021 when the energy crisis in Europe began.

While prices jumped due to maintenance in offshore Norway, including at the giant gas field Troll, which reduced pipeline gas exports, Europe's benchmark natural gas prices have fallen in recent months. They are currently 80% lower than the record levels seen last summer, primarily due to ample gas inventories and comfortable gas storage levels. EU gas storage sites are currently on track to be full well in advance of EU targets, with storage levels much higher than the five-year average and the levels from the same time last year. As of July 31, EU gas storage sites were 85% full, easing concerns about Europe's gas supply.

The surplus gas inventories have capped the price gains from the Norwegian maintenance stoppages, resulting in lower European gas prices. This has led traders to favor the Asian market where spot LNG prices have risen, especially amid heatwaves in Japan, South Korea, and parts of China.

The increasing discount of European gas prices compared to Asian LNG prices, which averaged around US$2.1/MMBtu in July compared to around US$0.3/MMBtu in June 2023, has further incentivized diverting more LNG cargoes towards Asia. This redirection of LNG could potentially reduce the supply glut in the European market, providing relief to European traders amid the ongoing energy crisis.