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Aug 10, 2023, 9:34am EDT
Australia-NZ

A possible strike by Australian LNG workers could shock global energy prices

Australia's Woodside Energy Group's exhibition booth is seen at the World Gas Conference 2022 in Daegu, South Korea May 23, 2022. REUTERS/Florence Tan/File Photo
REUTERS/Florence Tan/File Photo
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The News

Workers at three liquefied natural gas (LNG) sites in Australia are poised to strike as early as next week, sending natural gas prices in Europe skyrocketing Thursday and threatening about 10% of global exports.

Nearly all of the workers at Chevron and Woodside Energy Group voted in favor of strike action, but the two companies are holding talks with the unions Thursday in an attempt to avert the action over pay and working conditions.

We’ve curated reporting and insights about the potential strike, and how it reflects concerns over global gas supply.

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Insights

  • Russia’s invasion of Ukraine early last year meant turmoil across energy markets, as European countries turned to non-Russian sources for oil and gas. As a result, Australian LNG exports have climbed, marking an A$90 billion ($59 billion) industry in the country last year. Fears of a supply shortage from the possible strike sent European natural gas prices higher Thursday, and analysts expect European gas buyers will face stiff competition from those in Asian markets. — The Financial Times
  • The market response to the potential strike illustrates just how important Australian LNG is for “global energy security,” said Saul Kavonic, an energy analyst at Credit Suisse Group. But he was hopeful the strike would be averted before it made a significant impact on global LNG supply. — Bloomberg
  • The spike in European gas prices shows “the anxiety” over existing energy supplies after Russia’s invasion, Ewa Manthey and Warren Patterson note in ING’s commodities newsletter. Storage of gas in Europe, however, sits at about 90% of capacity and is trending over the five-year average.
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