Iran War Drags on, Spot LNG Prices Hold Steady Despite Optimism
The prolonged Iran war has put upward pressure on spot liquefied natural gas (LNG) prices, which could persist if the conflict continues. Tokyo Gas, Japan's largest city gas provider, is looking to optimize supply and demand through its global LNG trading capabilities. The company aims to reach an annual trading volume of 5 million metric tons by 2030, with a current trading volume in the fiscal year ended March 2025 in the high-4 million-ton range.
Tokyo Gas has reported a 65% decline in net profit for April to June, mainly due to the absence of one-off gains booked a year earlier. However, revenue was supported by stronger prices in its U.S. shale gas business, with an average Henry Hub gas price rising to about $5 per million British thermal units in the January to March period, up from $3.6 a year earlier.
The company hedges about 75% of its gas price exposure, and the remaining unhedged portion contributed to higher profit. Tokyo Gas operates an LNG trading business out of Singapore with support from offices in London and Tokyo, and is pushing to turn trading into a core growth driver.