Japan's Jera Co., the world's largest LNG buyer, expects disruptions to the Strait of Hormuz to persist, further curtailing flows from a region that previously accounted for about a fifth of global supply. Yukio Kani stated that Qatar LNG is unlikely to return to the market soon. LNG spot prices have doubled compared to last year, with market participants worried about the upcoming winter.
The lack of Qatari supply, the world's second-largest supplier before the conflict, sent prices to their highest level since late 2022. While LNG flows through Hormuz from Qatar and the UAE increased in September to the highest level since the Iran war began, transit remains 80% below February levels. Qatar extended force majeure on shipments to long-term Asian customers through November and to Europe through December.
Kani warned that seasonally low gas storage in Europe, combined with a EU policy banning Russian LNG imports from January, suggests spot prices will rise further. He noted that a severe winter in Europe would force the region to buy LNG for heating, putting Europe in a difficult situation.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing