(March 5): Asian liquefied natural gas (LNG) prices pulled back slightly from the highest level in three years, as the market weighed the viability of an American plan to ensure safe passage for tankers through the Strait of Hormuz.
Spot LNG eased to around US$23.80 per million British thermal units in Asia, said traders, but levels were still more than double compared with last week. The sharpest rally in European natural gas in four years came to an abrupt halt on Wednesday after President Donald Trump flagged the safe transit plan.
Natural gas prices jumped this week following a halt at Qatar’s Ras Laffan plant — the world’s biggest LNG export facility — and the effective closure of Hormuz, which is threatening the worst supply shock since Russia invaded Ukraine in 2022. Buyers in Asia are scrambling for alternative supply, with the disruption already impacting some industries and signalling higher electricity prices.
Some LNG tankers have redirected towards Asia after initially heading for Europe, as competition intensifies. Still, prices are too high for some buyers, especially India, traders said. Instead, those importers are opting for short-term supply cuts to industries, rather than taking expensive cargoes, they added.
Qatar’s halt especially affects Asia, with most of its production shipped to the region, and a prolonged halt is likely to increase competition with Europe for cargoes from other destinations, keeping prices high.
See also: US-to-Asia oil shipment costs hit record, some deals falter
Uploaded by Evelyn Chan
