LNG Prices Soar to Record $23/MMBtu Amid Heat Wave and Hormuz Disruptions

Liquefied natural gas (LNG) prices in the Japan-Korea market have surged to $23 per million British thermal units, their highest point since January 2023. This increase is largely due to a heat wave that has driven up electricity consumption, as well as disruptions in Middle Eastern supply routes.

The Strait of Hormuz, a vital corridor for LNG exports, has faced interruptions since an Iranian strike targeted a Qatari-flagged tanker in July. This has cast doubt on the dependability of Gulf-origin cargoes for buyers in Asia, particularly with Washington continuing to intensify economic measures against Tehran.

Japan and South Korea, both of which rely heavily on imported LNG to meet their domestic energy requirements, are bearing the brunt of this uncertainty. The impact is amplified by the heat wave, which is expected to sustain demand for gas-fired power generation nationwide.