US Gas Production Climbs as Europe's Russian Fertiliser Habit Outlasts Its Gas Ban

US Gas Production Climbs as Europe's Russian Fertiliser Habit Outlasts Its Gas Ban Lower-48 output is rising toward record levels while the EU, having cut Russian gas two-thirds, keeps buying the fertiliser made from it. US Lower-48 marketed gas production averaged 117.2 Bcf/d in the first quarter of 2026, the EIA said, a 4% gain on the same period a year earlier.¹ The agency expects full-year output to rise 3% on 2025, with the Permian alone reaching 29.2 Bcf/d, up 6%, and Haynesville growing 6% this year and 8% next.¹ That matters because the same abundance that is pushing American supply higher is the thing Europe still cannot replicate in one input it depends on: nitrogen fertiliser. Gas is roughly 70-80% of the cost of making ammonia, and Europe's structural gas deficit leaves its producers exposed in a way US plants are not. The EU banned Russian pipeline and seaborne gas and committed on December 3rd (2025) to end imports entirely by September 2027, yet it keeps buying Russian gas-based fertiliser, and in rising volumes, the Economist reported.⁶ The numbers behind Europe's gas retreat are stark. EU imports of Russian gas fell more than two-thirds, from 14.7 Bcf/d in 2020, the EIA said, driven by sanctions and policies aimed at cutting reliance rather than by a single import ban.³ Russian coal followed a similar path: Europe took 32% of Russia's coal exports in 2020 but only 13% by 2024, almost all of it going to non-member Türkiye.³ But cutting the molecule and cutting the product made from it are different problems. Brussels has leaned on tariffs to curb Russian fertiliser inflows, the Economist reported, yet those rising duties may not solve it.⁶ The logic is uncomfortable: by importing Russian urea and ammonia rather than the gas, Europe outsources the energy-intensive step to Russian plants burning cheap domestic gas, while its own producers run on costlier imported molecules. This is where US gas becomes the policy lever the story is built around. American ammonia and urea capacity runs on Henry Hub-priced gas, which trades at a persistent discount to European hubs, and additional US output gives the country room to displace Russian product in global fertiliser trade.¹ None of that is automatic. It depends on the US-Europe gas-price spread holding wide enough to keep American nitrogen competitive after freight. Russia, for its part, is not standing still on where its gas goes. Its production fell in the first half of 2025 even as exports to China and domestic use rose, Bloomberg reported via fullavantenews, with Chinese demand failing to fully replace lost European volumes.² The proposed Power of Siberia 2 pipeline would anchor more Russian gas flows eastward toward China, CSIS noted, reshaping where the cheap feedstock behind fertiliser ends up.⁵ Europe's hopes of a clean substitute look thin. Azerbaijan cannot supply enough gas to replace Russian volumes in the near term, the Columbia analysis found, with Naftogaz pointing to only about 2 bcm available against the 14 bcm the EU received via the Ukraine route.⁷ Ukraine, which earned transit fees once expected to total $7.15 billion, has its own stake in how those flows are rearranged.⁷ The price tape is muddier than the supply story. US gas prices rose on Monday (2026-05-18) as warmer-than-normal weather spread across both coasts, lifting cooling demand, fxempire reported.⁴ That is a near-term demand pull working against the longer production ramp, and it complicates any clean read on how much spare US gas is genuinely available to redirect into fertiliser feedstock or export. Signals across European gas remain mixed. The broader directional read skews bearish, but a cluster of contrarian supply-driven signals points the other way on ICE Endex TTF front-month and German baseload, a reminder that the European supply picture is far from settled even as US output grows. The thing to watch is the spread, not the headline. If US production keeps climbing toward the EIA's forecast while European hubs stay elevated, American nitrogen producers gain room to undercut Russian fertiliser in third markets.¹ If warm-weather demand and an eastward Russian pivot via Power of Siberia 2 tighten the global balance instead, the abundance argument narrows fast.^4,5 Tariffs alone, on the Economist's read, will not close the gap.⁶