Buyers Seek Cheaper LNG Deals as Hormuz War Disrupts Gulf Supply

Asian and European buyers of liquefied natural gas (LNG) are seeking cheaper and more flexible deals from Qatar and the United Arab Emirates, following a recent surge in insurance costs due to the U.S.-Iran war.

The conflict has disrupted oil and gas flows through the Strait of Hormuz, weakening the negotiating power of Gulf producers. Qatar's vast reserves have made it a dominant force in the global gas market, accounting for around one-fifth of global LNG export capacity.

Qatari LNG has been competitively priced due to low production costs, while the UAE offers more flexible terms. However, buyers say they will now use their leverage to drive down costs and request even more flexibility.

'Anyone entering into new contracts in the Gulf region will also have to take into account potential insurance costs, which are set to increase,' said Nicola Monti, chief executive of Italy's Edison.