South Korea Turns Back to Coal as LNG Crisis Deepens

Soaring prices of spot LNG supply amid the lack of Middle Eastern deliveries have pushed South Korea to rely more on coal-fired power generation in the coming winter, despite its pledge to shift away from fossil fuels. Like all other Asian importers, South Korea, the world’s third-largest LNG buyer after China and Japan, has been hit by the Middle East crisis and the lack of Qatari LNG supply. Soaring spot LNG prices for supply not needing the Strait of Hormuz have made running gas-fired plants uneconomical compared to coal. In the…

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.