Italy's US LNG Reliance Widens Its Power Premium Over the Rest of the EU

Italy's US LNG Reliance Widens Its Power Premium Over the Rest of the EU Italy's oil lobby says dependence on costlier American LNG has stretched the gap between Italian and other EU power prices since Russian gas was phased out. Italy's power prices have pulled further away from the rest of the EU since the country phased out Russian gas, and its oil industry association pinned the blame on a growing dependence on higher-cost US LNG, the group said on Wednesday (2026-06-10).⁶ The complaint puts a price tag on a strategic choice. Italy swapped Russian pipeline gas for seaborne LNG, much of it American, and that supply now sets the marginal cost of Italian power more often than the cheaper options available elsewhere on the continent. For gas-intensive manufacturers, the premium is a direct cost.⁶ The same association has been pushing a remedy. Italy is weighing state-backed long-term US LNG contracts to supply gas-intensive industries at discounted prices, Confindustria delegate Aurelio Regina told Montel on the sidelines of an industry event in Rome on Tuesday (2026-05-12). The gas would be bought under end-to-end deals by a consortium of gas-intensive companies and regasified at the 5bcm Ravenna terminal in northern Italy.⁵ The plan tries to fix with procurement what the market has done to pricing. Buying American cargoes under long-term contracts could lock in volumes and trim the premium industrial users pay, yet it deepens the very US dependence the lobby flags as the source of the gap.^6,5 European gas still carries a war premium. ICE Endex TTF front-month rose from the second week of January and pushed above 33 EUR/MWh during the first quarter, more than 20% above the end-Q4 level, before easing in February, Elenger's Q1 review showed. The front-month traded near €49.95 on Thursday (2026-06-11), down 0.87% on the day.³ The strain intensified after attacks on energy infrastructure in the Persian Gulf, chiefly the Ras Laffan complex in Qatar, which handles around 20% of global LNG supply, Elenger said. About 17% of Qatar's LNG will be offline for three to five years following the damage from military strikes. With Qatari volumes impaired, the marginal cargo into Europe is more likely to be American, and Italy's exposure to that pricing looks lasting rather than seasonal.³ US suppliers want Europe to ease the rules around that trade. American LNG exporters have asked the EU to delay enforcement of its methane emissions regulations until at least 2028, arguing the rules are already creating friction in transatlantic gas flows, Oilprice reported on 2026-05-20. For Italy, any compliance cost on US cargoes feeds straight into the premium the lobby is complaining about.² Italy has cheaper paths. Scaling up battery deployment could significantly cut the country's gas reliance by 2030, with the effects of the geopolitical crisis set to last, Solar Power Europe told Montel in the week of 2026-05-18. Batteries store power generated elsewhere rather than replace gas outright, but they reduce how often expensive gas sets the price at the margin.¹ Demand restraint is doing some of the work. EU countries have consumed about 10% less gas so far this year than in previous ones, the Economist reported on 2026-05-19. Italy's premium persists despite that continent-wide cut, which is what makes the lobby's complaint pointed rather than rhetorical.⁴ The test now is the shape of any Ravenna-anchored procurement deal and whether Rome puts state money behind it. If the consortium signs long-term US volumes at a discount, the question is whether locked-in American supply narrows Italy's power gap or simply binds the country tighter to the benchmark that opened it.^5,6