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LNG exports through Strait of Hormuz stall as conflict escalates

Tanker-tracking data cited by Reuters shows LNG flows paused for about three days, leaving markets exposed as the region moves toward the heating season.

Reported · Written up by our desk · Energy

Exports of liquefied natural gas through the Strait of Hormuz appear to have ground to a halt over the past three days, Reuters reported, citing data from tanker-tracking firms. The outlet said oil tanker traffic has also declined considerably. ING analysts wrote that the latest hostilities would likely hit gas markets more than oil markets, based on how LNG export recovery in the Gulf previously lagged after a June ceasefire deal between the United States and Iran. They noted that the rebound in vessel traffic after the earlier agreement did not immediately translate into LNG flows, and warned that any eventual resolution could again trigger only a slow ramp-up, with Europe viewed as the most vulnerable.

The disruption has already fed into higher LNG prices in Asia. Anadolu Ajansi reported that Asian LNG prices rose to levels seen in March, with the regional benchmark up 25% over the last four weeks, and that the Japan-Korea Marker price has increased by more than 60% on an annual basis.

In the week to July 16 alone, LNG prices in Asia gained 10%, with spot LNG prices in Asia reaching $20.2 per million British thermal units on July 16, traders told Bloomberg. The price move reflected the latest military developments in the region, even as Qatar has been ramping up production.

Latest closeNat gas $2.895 ▼1.0%

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