$7 Billion Gas Bill Dents Asian Markets' Faith in LNG

The loss of Qatari liquefied natural gas (LNG) supplies through the Strait of Hormuz has caused costs to skyrocket for Asian emerging markets. The US-Iran war, which started in late February, has led to a shortage of contracted LNG supply, forcing buyers into the spot market where prices are surging.

The major non-China emerging-market Asian buyers, India, Pakistan, Bangladesh, Thailand, and Vietnam, have collectively spent $7.4 billion on spot LNG since the start of the war. This is more than double the amount they spent on long-term contracts over the same period last year ($3.1 billion).

As a result, countries are rethinking their reliance on LNG as an energy source. Fabian Kor, executive vice president for Asia at SEFE Marketing & Trading Ltd., said that if prices remain high, 'LNG will have a problem competing with alternative fuels.'