Chevron expects LNG prices elevated for six months
Chevron’s Australia president expects liquefied natural gas prices to remain elevated for about six months as war-driven disruption to Middle East supply keeps the global market tight. Balaji Krishnamurthy, who leads Chevron’s Australian operations, said at the Gastech conference in Bangkok on Monday that higher prices were likely to persist while the market adjusts to reduced Qatari exports and…
Chevron Australia's president, Balaji Krishnamurthy, forecasts that liquefied natural gas (LNG) prices will remain high for approximately six months due to disruptions in Middle East supply caused by the US-Iran war. Krishnamurthy mentioned this at the Gastech conference in Bangkok, highlighting the tight global market and reduced Qatari exports.
He explained that Australian LNG carries a premium because of its close proximity to major Asian buyers. The situation has been exacerbated by the decline in shipping through the Strait of Hormuz, a vital route for global crude and LNG exports. Qatar, a major LNG supplier, has also imposed force majeure on some deliveries due to restrictions and security risks in and around the strait.
As a result, Asian spot LNG prices have more than doubled from pre-war levels, and market assessments in September have remained around the mid-$20s per million British thermal units. Despite being below the extreme levels experienced during the 2022 European energy crisis, these prices are high enough to strain industrial users and utilities in price-sensitive markets.
The pressure on LNG prices is also being amplified by the uncertainty surrounding the normal resumption of traffic through Hormuz. Maritime movements are far below pre-war levels, and security incidents involving commercial vessels have discouraged operators from using the route. Energy traders are now factoring in not only lost supply but also the costs of longer voyages, insurance, and operational delays.
This outlook aligns with the broader market expectations that supply risks will continue to be elevated during the northern hemisphere winter.
Written by urgent.news from Arabian Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
