Gas
Asian spot LNG prices reach four-year high amid Hormuz risks
Asian spot liquefied natural gas prices have climbed to $29.30 per million British thermal units due to security concerns near the Strait of Hormuz and heightened inter-basin competition.
Key points
- Asian spot LNG prices for December delivery reached $29.30/MMBtu, the highest level since late 2022.
- Security risks near the Strait of Hormuz and rising demand from China and South Korea have tightened global markets.
- European gas storage enters winter at a record low of 74 percent, according to Morgan Stanley analysts.
Market drivers
Asian spot liquefied natural gas prices climbed to $29.30 per million British thermal units (MMBtu) for December delivery, marking the highest level since December 2022, according to Pipeline and Gas Journal reporting on Reuters data.
Analysts attribute the surge to ongoing security risks surrounding the Strait of Hormuz and increased competition between European and Asian buyers for flexible cargoes. Although tanker transits and Qatari loadings have risen since September, persistent vessel attacks continue to support a geopolitical risk premium.
Global competition
Demand from Chinese and South Korean buyers in the spot market has intensified competition with Europe as the northern hemisphere approaches winter. ICIS reported that volatile tanker routing reflects this tug-of-war, with some vessels altering mid-Atlantic courses between European and Asian destinations.
In Europe, gas prices hovered around €88.57 per megawatt-hour on October 16. Morgan Stanley analysts noted that Europe will enter the winter heating season with storage levels at a record low of 74 percent, prompting upward revisions to winter price forecasts.
Meanwhile, shipping economics show varying regional trends. Spark Commodities reported that Atlantic freight rates remained steady while Pacific rates declined, noting that Nigerian prompt arbitrage currently favors Asian delivery routes.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Gas is the flexible backbone of many grids and the designated transition fuel in many national plans, from LNG trade to domestic LPG and CNG. Supply security and pricing drive both power reliability and emissions.
21.9% of electricity in the world came from gas in 2024Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
