The head of the world’s largest liquefied natural gas buyer expects disruptions to the Strait of Hormuz to persist, further curtailing flows from a region that accounted for about a fifth of global supply before the Middle East war.
“We don’t expect Qatar LNG coming back to the market soon,” Yukio Kani, chairman and global chief executive of Japan’s Jera, said on Bloomberg TV on Friday. LNG spot prices are double than this time last year, and “market participants worry about this coming winter”, he said.
The lack of LNG from Qatar, the world’s second-largest supplier before the conflict, sent spot prices to the highest level since late 2022 last month. The tighter market threatens greater competition between Europe and Asia, home to the biggest buyers of the super-chilled fuel, for alternative supply from the US and elsewhere.
While LNG flows through Hormuz from Qatar and the UAE increased in September to the highest level since the Iran war began, transit is still 80 per cent below February levels, according to Kpler. Qatar last month extended force majeure on shipments to long-term customers in Asia to November and to Europe to December.
Mr Kani said that seasonally low gas storage levels in Europe, coupled with a European Union policy to ban Russian LNG imports from January, “suggest that the spot price will go up further”.
If Europe has a “severe winter, they have no choice but to buy LNG to provide heating energy for people,” he said. “So Europe may be in a very difficult situation.”
