S8 Ep993: Michael Bernstam discusses a looming glut of liquefied natural gas driven by record U.S. shale production, which is stabilizing energy prices in Europe. Regarding Russia, he explains that while crude exports continue, Ukrainian drone strikes on refineries

A looming global glut of liquefied natural gas (LNG) is stabilizing energy prices in Europe and Asia, driven by record U.S. shale production and increased exports—despite ongoing disruptions like the blocked Strait of Hormuz and Qatar’s prolonged plant repairs. Michael Bernstam explains that U.S. LNG exports are now expected to reach 192 billion cubic meters by 2027, nearly matching pre-war Qatar output and effectively replacing lost supplies. This surge has locked in low LNG prices at around $650 per thousand cubic meters—up from under $400 pre-war but stable due to oversupply. The situation contrasts sharply with oil, where Russia faces a deepening crisis: Ukrainian drone strikes have crippled multiple refineries across Russia, disrupting domestic supply of gasoline, diesel, and jet fuel. Despite higher global oil prices, Russia is now forced to reduce crude exports in late June to prioritize domestic refining, signaling a structural collapse in its energy infrastructure. Even more telling, Russia is failing to meet its OPEC+ production quota—down to 9 million barrels per day, below its 9.7 million target—due to aging equipment, hard-to-recover oil, and sanctions. Meanwhile, the EU maintains its $44-per-barrel price cap on Russian oil not because of market forces, but to preserve its geopolitical stance, even as the rule would otherwise require an increase. The real story isn’t oil supply—it’s the failure of Russia’s refining capacity, which is now a strategic bottleneck.