LNG Shipments Through Strait of Hormuz Grind to a Halt as Conflict Escalates

Exports of liquefied natural gas via the Strait of Hormuz appear to have ground to a halt over the past three days, data from tanker-tracking firms have suggested, while oil tanker traffic has shrunk considerably, Reuters reported today. ING analysts, meanwhile, wrote in a note today that the latest hostilities would have a more serious impact on gas markets than oil markets, based on the previous rate of export recovery in the Gulf following the June ceasefire deal between the United States and Iran. “The post?MoU rebound in vessel traffic…

LNG Market Background

The global LNG market has undergone a structural transformation in recent years, with U.S. exports reshaping trade flows and providing consuming nations with greater supply optionality. European buyers have accelerated long-term LNG contracting following the disruption of Russian pipeline gas supplies.

New LNG liquefaction capacity — from the U.S. Gulf Coast, Qatar's North Field expansion, and Australian projects — is expected to add significant supply volumes through the late 2020s, with implications for long-term contract pricing and spot market dynamics.

What to Watch

Stakeholders will be tracking spot LNG cargo pricing in Asian and European markets, liquefaction plant utilization rates, and upcoming long-term supply contract negotiations as global LNG trade flows continue to evolve.