Key facts
- Asian spot LNG prices surged 10% to $20.2 per million British thermal units, the highest since March.
- Pakistan LNG Ltd paid approximately $20.70 per MMBtu for a spot LNG cargo, its highest price in four years.
- Supply disruptions from Qatar due to the Hormuz crisis are impacting global LNG flows.
- Europe's natural gas prices also increased amid the escalating tensions.
- EU gas storage levels are significantly below the 5-year average.
Asian spot liquefied natural gas (LNG) prices have surged by 10% in the past week, reaching their highest level since March, driven by renewed Middle East tensions and disruptions to shipping through the Strait of Hormuz. On Thursday, prices hit $20.2 per million British thermal units.
Pakistan LNG Ltd purchased a spot LNG cargo for approximately $20.70 per MMBtu, the highest price the country has paid in four years. This elevated cost is attributed to supply disruptions from Qatar, Pakistan's primary term supplier, exacerbated by the crisis in the Strait of Hormuz. The country is expected to procure the largest number of spot LNG cargoes in a single month since the Iran war began.
Europe's benchmark natural gas prices have also risen this week due to the disruptions affecting LNG shipments from the Middle East. The renewed impact on Qatar's LNG exports could tighten the global market as Europe seeks to refill storage facilities ahead of winter. ING strategists noted increased competition between Europe and Asia for spot LNG cargoes, further complicated by recent heatwaves in both regions. EU gas storage is currently at 53%, significantly below the 5-year average of 68% and short of the EU's target for the heating season.