There is a vast disparity in the volume of energy produced and consumed in the various regions of the world. The United States and Russia are the two giants of the natural gas world, being the highest and second highest producers and consumers in the world. The USA is the largest consumer and producer of natural gas, while Russia is the second largest consumer and producer. While exports in North America remain in that continent, primarily consisting of Canadian exports to the US, Russia is the largest exporter of natural gas in the world.
In the past year the natural gas market has been affected by the earthquake and tsunami in Japan creating an unexpected increase in demand and the Arab Spring reducing natural gas supplies. Demand may be reduced if a double dip recession occurs across the Euro zone and if current uncertainty remains. The current Iran-Israel conflict may escalate to cause conflict in the region. Israel has a nuclear missile that could potentially be used to know out Iran’s contentious nuclear facilities. If fighting between the two countries commences, Israel’s jets would have to be fuelled mid-air with the help of the UK or USA, brining more countries into the potential conflict. Although, whether the situation escalates to this level seems unlikely given the financial burden to the west of the Afghanistan and Iraq wars and current economic climate.
The US and Russia are the two biggest producers of natural gas collectively accounting for 37% of production in 2010. They are also the two biggest consumers of natural gas. However, the US has been increasing importing natural gas to meet demand and Russia is a net exporter of natural gas. In fact the US is the biggest importer worldwide followed by Japan and Germany. Production of natural gas is not expected to be constrained in the future, especially with recent shale gas discoveries in the USA and elsewhere. However, Russia has shut off gas supplies during conflicts with former USSR countries.