Hormuz Disruption Slams LNG Shipping Costs to Highest Levels Since 2022 Energy Crisis

The Strait of Hormuz, a critical maritime route for liquefied natural gas (LNG) shipments from Qatar and the UAE, has been disrupted since February 28, pushing LNG shipping costs to their highest levels since the 2022 energy crisis. According to data compiled by Anadolu from the Gas Exporting Countries Forum's (GECF) latest Gas Market Report, the disruption triggered sharp increases in LNG chartering, bunker fuel, and war-risk insurance costs.

The average bunker fuel price for the LNG carrier fleet rose 73% month-on-month in March to more than $800 per tonne, its highest level since the peak of the 2022 energy crisis. The disruption has also led to a significant increase in charter rates, with daily spot charter rates for tri-fuel diesel-electric (TFDE) LNG carriers surging from $5,000 in early February to $235,000 in early March.

The longer route taken by LNG carriers due to security risks along the Red Sea and Suez Canal route has added between 15 and 20 days to typical voyages between the Atlantic Basin and Asia-Pacific markets. This has increased the number of vessels needed to transport the same volume of LNG, further driving up costs.