Asian spot LNG tops $30 as tanker attack raises shipping concerns

Asian spot liquefied natural gas prices have exceeded $30 per million British thermal units for the first time since December 2022, OilPrice.com reported, citing Bloomberg. The increase followed news of an attack on an LNG tanker off Yemen, adding to concerns over the security of Middle Eastern energy shipments as buyers seek supplies for winter.

OilPrice.com cited a Saturday report from UK Maritime Trade Operations describing an LNG carrier being approached by a small boat in the Red Sea. People aboard the boat fired twice at the tanker, whose crew responded with warning shots, according to UKMTO. The incident underscored the continuing risks facing vessels using the route, even as some LNG cargoes continue to transit the area.

Bloomberg reported on Monday that a tanker loaded with Qatari LNG was crossing the Red Sea towards Poland, according to OilPrice.com. QatarEnergy holds a long-term supply agreement with Poland’s Orlen and has sought to fulfil such commitments despite declaring force majeure on exports shortly after the war involving the US, Israel and Iran began. The Red Sea passage could shorten delivery times to Europe, although the threat of further attacks could deter additional shipments.

LNG prices had already remained above $25 per million British thermal units for roughly a month as seasonal heating requirements approached, the outlet said. Asian and European buyers have been competing to secure winter gas, but high prices and reduced availability of Qatari supply are weighing on Asian demand. Europe, meanwhile, continues to pay higher prices to attract cargoes.

European gas storage was 74% full in the week covered by the report, against a five-year seasonal average of about 89%, OilPrice.com said. It warned that the latest price increase could further curb Asian purchases and encourage poorer countries to use more coal. European buyers have less scope for that response, the outlet argued, because EU countries have closed many coal-fired power plants under decarbonisation policies, increasing their exposure to costly LNG imports.