Asia-Europe LNG Price War Looms as Winter Approaches

The global liquefied natural gas (LNG) market is bracing for a price surge as Europe and Asia engage in a battle for scarce supplies. European buyers are facing increased competition from Asian nations, which are willing to pay higher prices to avoid shortages.

Asian countries such as India, Pakistan, and Bangladesh have already started buying multiple LNG cargoes at $25 per million British thermal units (MMBtu), a price that was not seen in 2022. This has driven up costs for European buyers, who are facing their lowest gas inventories in 15 years.

'India and Pakistan seem to be very accustomed to price volatility now,' said Takayuki Ueda, chief executive of Japan's Inpex Corporation. 'They still have a lot of enthusiasm to buy.'

Developing countries in Asia have few options to reduce their gas demand, having already cut consumption since the start of the U.S.-Iran war.