LNG Bunker Snapshot: ARA price soars as European gas supply risks mount

The price of liquefied natural gas (LNG) has surged, with the ARA price increasing by $178 per metric ton to $1,607 per mt in Singapore, $48 per mt to $1,537 per mt in Baltics, and $179 per mt to $1,713 per mt in Rotterdam. This rise is attributed to growing concerns over European gas supply risks, fueled by tensions between the US and Iran, and disruptions in supply through the Strait of Hormuz.

The International Energy Agency (IEA) gas analyst Greg Molnár stated that the most significant uncertainty is the duration of the Hormuz closure. The front-month Dutch TTF natural gas contract has also risen by 13% to $28.50 per MMBtu ($1,482 per mt), further driving up LNG bunker prices. Supply disruptions, including maintenance at Norwegian gas fields and the shutdown of the Interconnector UK pipeline, have exacerbated the situation.

European storage levels are at 68% full, down from 80% a year earlier, raising concerns about gas availability later in the winter. The ARA's LNG bunker price has benefited from a 6% rise in the bunker delivery premium, reaching $2.41 per MMBtu ($125 per mt). Singapore's LNG bunker prices have dropped to a $70 per mt discount from the ARA, as they typically track the NYMEX Japan/Korea Marker, which has risen by $0.80 per MMBtu ($42 per mt) to $24.89 per MMBtu ($1,294 per mt).