Hormuz Crisis Triggers LNG Price Surge and Inflation Fears

The Strait of Hormuz has become a major concern for natural gas markets due to its impact on LNG exports from Qatar, one of the world's largest exporters. The disruption has already led to Qatari company QatarEnergy extending force majeure on deliveries to European and Asian customers, affecting Italy's Edison alone with 29 cancelled cargoes since April, representing 3.8 billion cubic meters of gas.

This crisis is pushing buyers to look beyond spot purchases for LNG, seeking more diversified supply chains that do not rely on the Middle East. Japan's JERA has been building a portfolio across the US, Qatar, Malaysia, and Australia, while South Korea is also moving towards long-term US LNG agreements, with America expected to become its second-largest supplier from 2027.

The European gas market is already feeling the effects of this crisis, with storage levels at 65% capacity as autumn begins, leaving little room for error. The average price of natural gas in Europe has risen to around €75/MWh, its highest level in over three years, making LNG deliveries even more crucial.