Asian LNG Prices Surge on US-Iran Conflict

Asian spot LNG prices rose by 5% to nearly $26 per million British thermal units on Wednesday, following the resumption of strikes between the United States and Iran. The price surge came after US President Donald Trump stated that the U.S. had destroyed new equipment Iran attempted to build along the Strait of Hormuz.

The current situation is a result of continued blockages in the Strait of Hormuz, which has led QatarEnergy, the state-owned Qatari firm, to extend its force majeure on LNG deliveries into November. This has driven demand for spot cargoes in Asia, particularly from South Asian buyers such as Pakistan and Bangladesh.

The price exceeded $27 per mmBtu, making it too high for Pakistani utilities. The recent Middle East developments suggest that a return to normal LNG flows from the Persian Gulf is not imminent, which may lead to further price increases as seasonal demand for gas picks up.