LNG Prices Soar to Record High, Asia's Demand Takes Hit
The liquefied natural gas (LNG) market is experiencing a significant impact from soaring prices, which have more than doubled since February 28. The conflict involving the US, Israel, and Iran has led to disruptions in Gulf supplies, tightening the market and pushing Asian spot LNG prices to around $26 per million British thermal units (mmBtu), their highest level since December 2022.
Asian LNG demand is expected to fall by 3-10% from 2025 levels this year, with Northeast Asia accounting for most of the decline. However, India and Bangladesh have shown resilience in securing spot LNG cargoes despite the sharp rise in prices.
The city gas distribution and fertilizer sectors in India are collectively responsible for approximately 70% of the country's total LNG imports, according to LSEG analyst Shruti Shah. Demand from these sectors is expected to remain strong.