LNG Demand Sees Rebound on US-Iran War Ceasefire
Gas demand in China, India, and Pakistan is expected to rebound once the US-Iran war ends and new supplies emerge. The conflict has prevented Qatar and the United Arab Emirates from exporting most of their liquefied natural gas (LNG) via the Strait of Hormuz, through which a fifth of global supplies used to pass. This has led to a supply crunch, driving up prices to nearly $30 per million British thermal units in Asia.
Shell estimates that the world has lost about 36 million tons of LNG from the Middle East so far this year. India's GAIL Chairman Deepak Gupta said at a conference in Bangkok that high prices are 'definitely impacting' demand, and that many industries switch to different fuels when gas is not viable.
Executives from Shell, GAIL, PetroChina, and ExxonMobil expect consumption to rebound once prices fall. They anticipate around 150 million to 200 million tons of LNG coming online in the next four to five years. PetroChina's CEO expects demand from gas-fired power plants to rebound when LNG prices return to a 'normal' range of $7 to $9 per MMBtu.