Key facts
- A Qatari LNG cargo is heading to Europe via the Red Sea and Suez Canal.
- The shipment is rare due to Houthi threats in the southern Red Sea and Bab el-Mandeb Strait.
- Poland is the destination for the LNG cargo.
- European storage sites are only 74% full, down from over 86% last year.
A Qatari liquefied natural gas cargo is traveling north through the Red Sea towards Europe, a rare transit of the shortest but dangerous route amid ongoing Houthi threats to shipping. The tanker, loaded in August, is headed for Poland via the Suez Canal, according to vessel-tracking data compiled by Bloomberg. QatarEnergy, the state-owned energy firm, has term contracts to supply LNG to Poland's Orlen and other European buyers. However, since the Iran war began, the Strait of Hormuz has been closed, and attacks have damaged Qatar's Ras Laffan liquefaction complex, leading QatarEnergy to extend force majeure on deliveries. Most LNG carriers are navigating through the Strait of Hormuz in dark mode, complicating tracking and supply balance estimates. While some Qatari and UAE cargoes have transited the Strait of Hormuz recently, volumes remain insufficient to significantly impact global LNG balances. LNG traffic at the Strait of Hormuz is reportedly increasing despite heightened threats, though flows are still over 75% below pre-war levels. The lack of Qatari gas has led to declining Asian LNG demand due to high prices, while Europe is paying more for supply, yet its storage sites are only 74% full compared to over 86% at the same time last year and in the preceding five years. This rare Red Sea shipment is expected to expedite delivery to Europe, avoiding the longer route around the Cape of Good Hope.