Asian LNG Demand Set to Rebound on End of US-Iran War Supply Crunch

LNG demand in Asia is expected to rebound once the Middle East supply crunch ends and new supplies emerge, according to industry executives. The US-Iran war has prevented Qatar and the UAE from exporting most of their LNG via the Strait of Hormuz, driving up prices.

Asia's spot prices have surged to nearly $30 per million British thermal units from a pre-war range around $10 per MMBtu. Pakistan, China, and India are among the countries that have seen demand decline due to high prices.

The CEO of Petronet LNG said consumers in India are seeking price stability, while GAIL's Chairman Deepak Gupta noted that affordability is a major challenge. He added that India had to limit gas consumption initially but resumed supplies to almost 90% to 95% as it ramped up its capability to buy LNG from elsewhere.

ExxonMobil, GAIL, and PetroChina executives expect consumption to rebound once prices fall. They estimate about 150 million to 200 million tons of LNG coming online in the next four to five years.