What’s more, Russia may be steeling itself for the coming E.U. sanctions, said Michelle Wiese Bockmann, an analyst and markets editor at Lloyd’s List, a maritime information group in London. She said it may follow the model used by Iran and Venezuela, both sanctioned oil exporters that have used methods like reflagging older tankers and transferring cargoes from one ship to another at sea. Such shipping practices are legal but can obfuscate the source of cargoes.
“Sanctions are obviously foreign policy tools, but they are very blunt tools,” Ms. Bockmann said. “Whenever there are sanctions or restrictions or additional risk, there’s money to be made.”
Soaring natural gas prices haven’t attracted the same attention as higher prices at the pump. But that could change when the summer driving season ends and the winter heating season begins. The Henry Hub prices for natural gas, an industry benchmark, have risen to around $8 a million British thermal units from less than $4 at the start of the year.
Europeans have been cutting back on their purchases of Russian natural gas, which flows through pipelines. They have turned instead to buying more liquefied natural gas, which has been supercooled so that it can be shipped around the world in tankers. European L.N.G. imports from the United States rose to a record high in the first five months of 2022.
Exxon Mobil, which has invested in building an L.N.G. business along the Gulf Coast, is the largest holding in many U.S. energy funds. But despite calls to increase oil drilling and expand facilities for L.N.G. to offset sanctioned Russian oil and gas — which could ultimately lower commodity prices — Exxon and other energy companies are focusing on profitability, experts say, a practice the markets refer to as capital discipline.
“Capital discipline is still very much the watchword,” said John Maloney, the chairman of M&R Capital Management, a New York wealth management firm. “They are focused on reducing the company debt and returning profits to shareholders through stock buybacks.” Unlike in past oil booms, he said, “They’re not shifting to ‘Drill, baby, drill.’”
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