Asian LNG Spot Prices Rise to Five-Month High as Strait of Hormuz Concerns Persist
nashnova research
Asia spot LNG surged to $24.614 per MMBtu, a five-month high, as military clashes near the Strait of Hormuz have all but halted LNG shipping through the chokepoint — forcing South Asian buyers into a scramble for cargoes and repricing the region's supply outlook.
Why did LNG just hit a five-month high?
The trigger: the U.S. and Iran engaged in direct military exchange for the first time in roughly a month, shaking confidence in safe passage through the Strait of Hormuz.
On August 31, a tanker completing an outbound Hormuz transit reported being struck by three unidentified projectiles, about 17 nautical miles east of Oman's Khasab.
This means → the risk is not hypothetical — a vessel has already been hit. That is the hardest possible floor under prices.
How much gas is the strait actually choking off?
The Strait of Hormuz previously carried roughly one-fifth of global LNG supply, but LNG shipping through it has largely ground to a halt — only oil-tanker transits have partially resumed.
In plain terms = oil tankers are still slipping through; the bigger, more risk-averse LNG carriers are mostly staying away.
This reflects a key divergence: for the same chokepoint, oil and gas have different risk thresholds — LNG shipping is far more sensitive to geopolitical disruption.
Who is scrambling for cargoes — and how much?
Pakistan and Bangladesh are actively seeking spot purchases to cover the supply gap left by the Hormuz shutdown.
Taiwan's CPC bought three LNG cargoes on a DES basis, spanning late October to early November delivery.
Bangladesh's Rupantarita Prakritik Gas re-tendered for four cargoes for September–October; India's GAIL is seeking two cargoes for October–November; Japan's Kansai Electric is seeking four cargoes from November 2025 through March 2027.
This means → buyers have shifted from "wait-and-restock" to "lock volumes across seasons." Kansai Electric's five-month procurement window signals the market expects tightness to persist well into next year.
Does Europe have enough gas — and will it compete with Asia?
European gas prices are hovering near highs last seen when the U.S.–Iran conflict first erupted; storage sits at roughly 65%, well below the five-year seasonal average of about 82%.
Europe's 30-day LNG import average is 137,000 tonnes per day — only about 2.2% above the five-year seasonal norm. Imports have not surged meaningfully.
In plain terms = Europe's storage gap is large, but its restocking pace hasn't caught up yet. Once pre-winter buying accelerates, European and Asian buyers will be bidding for the same cargoes.
What are freight rates and futures saying?
Pacific spot freight for 174,000-cbm vessels fell to $45,000/day on Friday, down 14% from the prior session.
On the futures side: the JKM front-month contract slipped 2% Monday to $22.705/MMBtu; the U.S. Gulf LNG export front-month rose 2% to $21.10/MMBtu.
This means → spot prices are elevated but futures are pulling back — the market is pricing a short-term panic premium, not a structural supply deterioration. If the strait situation eases, the downside for prices is substantial.
Where U.S. LNG flows next determines how much Asia gets
Spark Commodities data show that shipping U.S. LNG to Europe is currently more profitable than shipping to Asia.
This means → profit incentives will steer American cargoes toward Europe first, further squeezing the marginal supply available to Asian buyers.
In plain terms = Asia faces a two-sided problem — the strait is blocked on one end, and fresh cargoes are being diverted to Europe on the other. Squeezed from both directions, the floor under spot prices is unlikely to give way soon.
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