World’s top LNG buyer sees Qatar supply disruption persisting into winter
(Bloomberg) -- 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.
Japan's Jera chairman, Yukio Kani, anticipates ongoing disruptions in the Strait of Hormuz to continue impacting LNG supply, particularly from Qatar, which supplies around a fifth of global LNG. Kani expressed skepticism about the return of Qatar LNG to the market in the near future. Spot prices for LNG have nearly doubled compared to last year, prompting concerns among market participants for the upcoming winter.
The shortage of LNG from Qatar, the second-largest supplier before the conflict, contributed to spot prices reaching their highest level since late 2022. The tighter market is likely to intensify competition between Europe and Asia for alternative supply sources from the US and elsewhere. Though LNG flows through Hormuz from Qatar and the UAE increased in September to the highest level since the Iran war began, they are still 80% below February levels, according to Kpler data.
In September, Qatar extended force majeure on shipments to Asian long-term customers until November, and to European customers until December. Kani attributed the expected rise in spot prices to low gas storage levels in Europe and the EU's policy to ban Russian LNG imports from January. He warned that if Europe experiences a severe winter, it may be forced to purchase LNG for heating, potentially placing the region in a challenging position.
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