China's LNG Imports Hit by Middle East Conflict Costs

China's liquefied natural gas (LNG) imports are on track to decline for a second consecutive month due to higher prices. According to Kpler data, September LNG flows to China will be around 5.3 million tons, an 8% decrease from the same period last year but slightly higher than August's 5.2 million tons.

The increased costs are driven by the ongoing conflict in the Middle East, which has pushed prices up to over $20 per million British thermal units (mmBtu) on the spot market. This represents a significant increase from last year's levels, with prices reaching as high as $26 mmBtu in early September.

Higher prices are not only affecting China but also other Asian energy importers, with Kpler forecasting total Asian inflows at their lowest level in eight years, at 20.09 million tons for September.