European gas surges as Chevron receives a strike notice in Australia

Natural gas prices in Europe have surged after Chevron announced strikes at its liquefied natural gas export plants in Australia. Unions have initiated protest action at the Gorgon and Wheatstone export plants. The benchmark futures contracts rose by up to 10% after the news.

The market has been on edge this month due to labour disputes in Australia, one of the world’s major producers of liquefied natural gas, as strikes could limit global supplies during a critical period as Europe prepares for winter. If walkouts occur in Australia, disruptions could force Asian buyers to compete with Europe for replacement cargoes from the U.S. or Qatar.

The region remains vulnerable to disruptions in the global supply chain after being hit last year by the worst energy crisis in decades. In addition to strike risks, traders closely monitor flows from Norway, Europe’s main gas supplier, which have fallen to their lowest level in over a year due to seasonal maintenance.

European energy choices, especially that of Germany, leave the Eurozone vulnerable and dependent. The dichotomous decisions of Europeans could be costly to their industry and push the extremes to the forefront.

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