Asian LNG prices set to rise as US plans Iranian ports blockade

Prolonged disruptions to Strait of Hormuz could lift Asian spot prices above $19 per million British thermal units, traders said, though that would be lower than a wartime high of $25.

Pipelines at Jera Co.'s Futtsu Thermal Power Station in Futtsu, Chiba Prefecture, Japan, on Thursday, May 8, 2025. Jera is Japan’s largest liquefied natural gas buyer and top utility. | Photographer: Kiyoshi Ota/Bloomberg

Asian spot liquefied natural gas prices are set to rise, as the US moved to blockade the Strait of Hormuz after Washington and Tehran failed to reach an agreement in peace talks over the weekend.

US forces will begin implementing a blockade of all maritime traffic entering and leaving Iranian ports on Monday at 10 a.m. New York time, the US Central Command said. They won’t impede freedom of navigation for vessels transiting the strait to and from non-Iranian ports, Centcom added.

The failure of the peace talks raises concerns that LNG flows through Hormuz, which carried about a fifth of the world’s supply before the war started at the end of February, will be hampered for longer. Prolonged disruptions to the strait could lift Asian spot prices above $19 per million British thermal units, traders said, though that would be lower than a wartime high of $25.

Traders will be closely monitoring how aggressive China — the world’s top LNG buyer last year — refills its storage, and whether it needs to pull shipments away from Europe to do so. State-owned oil and gas company China National Petroleum Corp. this month started injections into major underground storage sites across the west of the nation to ensure sufficient supply.

Asian spot LNG prices were at just above $17/mmbtu at the end of last week, dipping on optimism around a temporary ceasefire to the war.

More News:

• Gulf purchased two LNG cargoes on a DES basis for June 13-14 and June 16-17 delivery to Thailand at a discount to the JKM benchmark
• Rupantarita Prakritik Gas is looking to buy two cargoes on a DES basis for May 12-13 and May 14-15 delivery to Bangladesh
• State-owned Indian Oil Corp. purchased a cargo on a DES basis for May delivery at the mid-to-high $16/mmbtu
• Asian LNG imports have dropped to the lowest in almost six years as the conflict in the Middle East chokes supplies and forces buyers to curb consumption

Drivers:

• European natural gas prices jumped after the US vowed to blockade all vessels passing through the Strait of Hormuz that called at Iran ports or were headed there
• China’s 30-day moving average for LNG imports on April 12 was 107k tons, 21% lower than a year ago, according to ship-tracking data
• European gas-storage levels were ~29% full on April 11, compared with the five-year seasonal average of ~42%
• Europe’s 30-day moving average for LNG imports was 246k tons/day on April 9, 13% higher than the five-year seasonal average, according to ship-tracking data
• Estimated flows to all US export terminals were ~19.9 bcf/day on April 12, up 2.8% w/w: BNEF

Buy tender:

Company	Cargoes	Port	Delivery	Bids Due
RPGCL	2 DES cargoes	Bangladesh	May	April 13
Enarsa	2 DES cargoes	Argentina	May	April 15

Vessel Rates:
Pacific spot earnings for a 174k cubic-meter vessel were at $73,000 on Friday, down 4% from the previous session, according to data from Spark Commodities, based on assessments from LNG shipbrokers Atlantic earnings were at $89,750, up 1.7% the previous session NOTE: Spark values calculated on a round-trip basis, including hire, ballast bonus and lump sum estimates

Prices:
Japan-Korea Marker futures on Nymex for May delivery -0.4% to $19.420/mmbtu on Friday June contract -3.1% to $16.530/mmbtu Dutch TTF futures for May delivery -5.3% to $14.989 on Friday June contract -5.4% to $14.996

 

–With assistance from Kathy Chen.

Disclaimer: This report is auto generated from the Bloomberg news service. ThePrint holds no responsibility for its content.