UK ramps up gas and oil exports to EU amid Russia’s war in Ukraine | Oil

The UK has drastically increased the volume of natural gas being pumped to the EU amid Russia’s war in Ukraine, powering a record monthly rise in goods exports to the continent despite Brexit.

Figures from the Office for National Statistics show EU goods exports rose for the third consecutive month to £16.4bn in April, the highest monthly level in current prices since comparable records began in 1997.

Reflecting the impact of the war in Ukraine as EU nations seek to diversify energy supplies away from Russia, the data suggests the UK is acting as a hub for liquified natural gas (LNG) imports from the rest of the world before pumping it through pipelines to the mainland.

UK fuel exports rose by £500m on the month, driven by gas and crude oil to the Netherlands and Ireland, in a sign of heightened demand on the continent to refill gas storage sites in the run-up to winter.

Much of the rise in total goods exports was driven by the rising value of fuel prices rather than volumes of other products. After adjusting for inflation, goods exports were the highest since December 2020, the last month before the Brexit transition ended.

Vladimir Putin’s invasion of Ukraine has contributed to a dramatic rise in global energy prices amid concern over the security of supply, fueling the highest rates of inflation for decades in several countries including the UK. EU nations linking on Russia for much of their energy have sought alternative supplies while reducing imports in response to the war.

Analysts said EU countries such as Germany lacked LNG terminal facilities. Jack Sirett, the head of dealing at Ebury, a financial services firm, said: “The UK is a key global importer of the fuel which it then exports to Europe via pipeline, particularly given small storage capability in the UK.”

The UK is home to three of the largest terminals in Europe for converting LNG back into gas, two at Milford Haven in Pembrokeshire and the other at the Isle of Grain in north Kent. Imports to these sites have risen sharply from the US and Qatar as western governments move to reduce their reliance on Russian supplies.

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The ONS said UK exports to Russia fell to the lowest monthly value since January 1999, while monthly imports fell to the lowest since March 2004.

Although the UK has among the highest LNG terminal capacities in Europe, it has among the smallest storage facilities to build stockpiles in the run-up to winter. The UK’s biggest gas storage plant, the Rough facility in the North Sea, was closed in 2017 after the government refused to subsidize maintenance and upgrades needed to keep it open.

HSBC estimates Europe’s four biggest storage holders – Germany, Italy, the Netherlands and France – have capacity equivalent to more than a quarter of annual consumption, while the UK has only 2% of annual demand. This makes the UK more dependent on domestic production, pipeline and LNG imports.

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