Keeping Europe Warm This Winter Comes Down to Asia’s Weather

(Bloomberg) -- As it weans itself off Russian fuel and races to secure enough natural gas and coal, Europe’s quest to stay warm this winter will depend heavily on three nations on the other side of the world: Japan, South Korea and China.

The Asian countries, among the world’s biggest importers of liquefied natural gas and seaborne coal, all share a peak heating demand season during the winter with Europe. It’s still too early for meteorologists to make accurate predictions for winter weather patterns, but any forecast for steep dips in temperatures in the three nations could spark a more intense tussle for cargoes.

International competition for fuel has increased since Russia’s invasion of Ukraine upended global trade flows, helping push prices of coal and natural gas to records. In Europe, the squeeze is just about to get tighter. The European Commission will implement a full ban on Russian coal beginning next week, while Gazprom PJSC has slashed pipeline gas flows to Europe. Russia has historically been the European Union’s biggest gas supplier, covering about 40% of demand.