Hormuz Strait Disruption Drives LNG Shipping Costs to Crisis Peak
The Strait of Hormuz disruption has pushed liquefied natural gas (LNG) shipping costs to their highest levels since the peak of the 2022 energy crisis. The average bunker fuel price for LNG carriers rose by 73% in March to over $800 per tonne, a sharp increase that is affecting global markets.
The Strait of Hormuz serves as the only maritime export route for LNG shipments from Qatar and the UAE, which account for one-fifth of global supply. The conflict in the Middle East led to a near-standstill in LNG exports from these countries between February 28th and June. More than 300 Qatari LNG cargoes and around 20 UAE cargoes failed to reach international markets.
The disruption also had a ripple effect on charter rates, fuel costs, and insurance expenses for LNG carriers. Daily spot charter rates surged from $5,000 in early February to $235,000 in early March, while average TFDE charter rates rose from $18,000 per day in February to $108,000 in March.