Asian Spot LNG Prices Hit Five-Month High Amid Hormuz Conflict
Asian spot liquefied natural gas (LNG) prices reached a five-month high this week due to the ongoing conflict in the Strait of Hormuz.
Hopes for reopening of the strait have faded amid an impasse in U.S.-Iran talks, causing supply constraints and restricted traffic through the strait. The average price for October delivery into north-east Asia LNG-AS was estimated at $22.50 per million British thermal units (MMBtu), up from $21.30/ MMBtu last week.
'We see the geopolitical premium remaining firmly embedded in the global LNG market, as supply remains constrained and traffic through the Strait of Hormuz is still severely restricted,' said Arturo Regalado, senior LNG analyst at Kpler. 'Any indication of progress in U.S.-Iran negotiations could rapidly unwind some of the geopolitical premium built into prices.'
The Strait of Hormuz remains largely closed, with around 33 LNG cargoes exiting in the last six months, averaging around five per month, against more normal levels of 90 to 100 per month.