LNG Shipments Through Hormuz Hit Highest Level Since Iran War Began

LNG shipments through the Strait of Hormuz reached their highest level since the beginning of the Iran war in September, according to shipping data from Reuters. Kpler, a shipment analytics firm, estimated that 21 cargoes successfully navigated the Strait last month, a figure well below pre-war levels. The Strait of Hormuz, which once handled one-fifth of global LNG supply prior to the war, currently allows only three LNG cargoes per day, down from an average of three per day during pre-war times.

The difficulty in tracking these LNG shipments, compounded by most carriers traveling in "dark mode" through the Strait, has made it challenging to accurately estimate flows and global supply balances. While crude oil cargoes have been flowing through the Strait at a rate of millions of barrels per day, LNG cargoes have faced significant challenges in transit due to the gas's complexities in reloading through ship-to-ship transfers.

This bottleneck has contributed to soaring gas prices in Asia and Europe, as buyers compete for the limited available supply that doesn't have to pass through the Strait of Hormuz. Recently, Qatar extended a force majeure notice on LNG deliveries to Asia and Europe by another month, as the Strait of Hormuz remains largely blocked amid the ongoing U.S.-Iran standoff over the chokepoint and potential pathways to end the war.

Experts are growing increasingly concerned that severely reduced LNG flows from the Middle East could jeopardize winter gas supply for Europe and Asia, particularly if winters turn out to be colder than usual.