LNG Prices to Soar as Europe Faces Record-Low Gas Stocks

Global liquefied natural gas (LNG) prices are expected to spike this winter due to low European gas stocks and increased competition for North Asian buyers. Europe's storage levels are at a record low, with only 67% of capacity filled, compared to an EU target of 80% by December.

The Strait of Hormuz remains closed, preventing Qatar and the United Arab Emirates from shipping LNG, resulting in a loss of 36 million metric tons of supply this year. This has led to increased prices for Asia's spot market, which have nearly tripled to around $30 per million British thermal units.

Industry executives warn that if it's a colder winter than normal, prices could reach $40/mmBtu, equivalent to about $240 per barrel for Brent. Equinor's Senior Vice President Marketing and Supply Helle Ostergaard Kristiansen said European buyers may have to compete with Asia for US supplies, but the 45-day journey from the U.S. to North Asia poses a challenge.