"Asian LNG" surges past $23; Qatar extends force majeure declaration due to continued Hormuz disruptions.

Asian spot LNG prices surged to $23.388 per million BTU, more than double pre-war levels, after Qatar extended its force majeure declaration for LNG deliveries.

On August 28, 2569, at 15.03:1 PM, Bloomberg News reported that spot prices for liquefied natural gas (LNG) in Asia rose amid concerns over the unresolved situation in the Strait of Hormuz. This followed Qatar's extension of a force majeure declaration for LNG deliveries to European and Asian customers by one month, while LNG shipments via this strategic route remained virtually stalled.

Market traders reported that spot LNG prices in Asia rose to $23.388 per million BTU, with supply concerns remaining a key driver of prices.

This week, Qatar Energy, Qatar's state-owned energy company, informed buyers in Pakistan that the cancellation of LNG deliveries will continue until October, according to information from traders familiar with the matter.

In addition, Qatar Energy extended its Force Majeure declaration for LNG deliveries to Edison until November 4th, reflecting the continued impact of shipping issues through the Strait of Hormuz on Qatar's ability to deliver LNG to international markets.

The volume of LNG shipments through the Strait of Hormuz remains near stagnant, even though the number of oil tankers traveling through the route has increased.

Admiral Brad Cooper, the top U.S. military commander in the Middle East, stated that U.S. forces have cleared Iranian mines from the route and announced that the international shipping lane is now open.

However, LNG transportation has not yet fully returned to normal, and delays in the resumption of shipping through the Strait of Hormuz are likely to keep LNG prices high.

Before the war, the Strait of Hormuz was the shipping route for approximately one-fifth of the world's LNG volume, while current spot prices are more than double those before the war.

Amid high prices, India's LNG importers continue to purchase on the spot market, with Bharat Petroleum Corp. and Hindustan Petroleum Corp. recently buying LNG for September delivery in India at prices in the upper range of $23 per MMBtu.

Meanwhile, European natural gas markets are heading for a third consecutive week of gains, as doubts grow about whether the agreement between Iran and Oman regarding shipping through the Strait of Hormuz will lead to a broader deal that includes the United States.

These concerns arise as European gas reserves remain below normal levels, with European gas inventories at approximately 64% capacity as of August 26, compared to a five-year seasonal average of around 81%.

Meanwhile, European LNG imports, measured by a 30-day moving average, stood at approximately 129,000 tonnes as of August 27, about 0.8% below the 5-year seasonal average.

On the Chinese side, the 30-day moving average of LNG imports as of August 27 was approximately 169,000 tons, a 13% decrease from the same period last year, according to shipping tracking data.

As of August 27, the U.S. had approximately 19.5 billion cubic feet of natural gas delivered to all LNG export terminals, a 12% increase from the previous week, according to BloombergNEF.

Data from Spark Commodities also indicates that exporting LNG from the US to Europe is currently more profitable than exporting to Asia. The net back for LNG shipments to Northwest Europe is approximately $0.321 per MMBtu higher than for shipments to Northeast Asia via the Cape of Good Hope bypass route.

In the LNG shipping market, spot revenue for 174,000 cubic meter vessels on the Pacific route was $52,500 per day on Thursday, down 6.7% from the previous day, while the Atlantic route was $11,750 per day, up 4.4%.

The overall LNG market remains largely driven by uncertainty in the Strait of Hormuz. Although shipping routes are beginning to open up for oil tankers, the slow recovery of LNG transportation, coupled with Qatar's extended Force Majeure, means supply risks persist and are likely to keep LNG prices at high levels.

Reference: bloomberg.com

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