Asian LNG prices top $30 per mmBtu after Red Sea tanker attack report
Spot liquefied natural gas prices in Asia climbed above $30 per million British thermal units, the highest level since December 2022, after a reported attack on an LNG tanker near Yemen renewed concerns over Middle East shipping.
The UK Maritime Trade Operations body said an LNG carrier came under fire from a small boat in the Red Sea over the weekend, with shots exchanged between the attackers and the vessel’s crew. The incident adds to concerns that shipping through the region remains exposed to disruption.
LNG prices had already been trading above $25 per mmBtu for roughly a month, as buyers in Asia and Europe compete to build up winter supplies ahead of the heating season. Despite the reported attack, a tanker carrying Qatari LNG was still reported moving through the Red Sea toward Poland on Monday, part of QatarEnergy’s long-term supply arrangement with Poland’s Orlen.
That shipment comes even though QatarEnergy had declared force majeure on exports following the outbreak of the conflict between the United States, Israel and Iran. The Red Sea route can speed up deliveries to Europe, but the risk of further attacks may deter shippers from relying on it more heavily.
With less Qatari gas reaching Asian buyers, demand there has started to soften at current price levels, pushing some lower-income importing nations toward coal instead. Europe, which has shut down much of its coal generation capacity as part of its decarbonization push, has fewer alternatives and continues to pay up for cargoes. European gas storage sites were only 74% full this week, compared with a five-year seasonal average near 89% for this time of year.
This matters for energy markets because sustained Asian LNG prices above $30 per mmBtu tighten global gas supply and raise input costs for utilities and industry, with knock-on effects for European gas prices, broader energy inflation, and demand for alternative fuels such as coal and oil.
Source: OilPrice.com