China's LNG Imports Slump Amid Middle East Price Surge

China's imports of liquefied natural gas (LNG) are poised to decline for the second consecutive month, due in part to significantly higher prices driven by the ongoing conflict in the Middle East. According to data from Kpler, cited by Bloomberg, September LNG flows to China are expected to reach 5.3 million tons, representing an 8% decrease compared to last year's imports.

This decline marks a reversal of the buying spree that began in May, during which China was purchasing LNG at rates higher than those seen in 2022. The increased prices have also led other Asian energy importers to curb their purchases, with Kpler forecasting total Asian inflows to reach the lowest level in eight years.

China's state-owned LNG importers are reportedly exploring options to secure long-term supplies from exporters that do not rely on the Strait of Hormuz, a move aimed at reducing the country's exposure to gas deliveries from the Persian Gulf. Qatar has recently extended its force majeure on exports of superchilled fuel, which is likely to maintain elevated prices for the foreseeable future.