Chevron Sees Six Months of High LNG Prices Amid Ongoing Supply Disruptions

Chevron Australia's Managing Director Balaji Krishnamurthy says LNG prices are unlikely to fall in the next six months due to ongoing supply disruptions from the Middle East. The company operates two massive LNG projects in Australia, Gorgon and Wheatstone, which account for about 5% of global LNG supply.

The spot Asian LNG price jumped to its highest level since December 2022 last week, reaching $26.00 per million British thermal units (MMBtu) for October delivery into northeast Asia. This is up from $25.70 per MMBtu the previous week and a result of the re-escalation in the Middle East that further delayed any recovery of LNG flows out of the Strait of Hormuz.

Some LNG shipments have moved out of the chokepoint, but the trickle of supply is not enough to meet demand ahead of the winter heating season in Asia and Europe. The average price for October delivery into northeast Asia is now at its highest level since December 2022, and Krishnamurthy says he 'has a hard time seeing the prices come down'.