Hormuz LNG Flows Still Down More Than 75% Despite Rebound

LNG traffic through the Strait of Hormuz has shown a slight uptick despite ongoing threats to shipments in the narrow waterway, according to data from Bloomberg and Kpler. Three LNG carriers have successfully navigated the Strait outbound since the end of last week, contributing to a rebound in transits in September. However, the volumes of liquefied natural gas still remain more than 75% lower than pre-war levels.

UK Maritime Trade Operations, affiliated with the Royal Navy, reported an attack on a tanker in the Strait of Hormuz on Sunday, marking the eighth such incident in the past week. September saw 21 LNG cargoes exit the Strait, the highest monthly number since the onset of the Iran war, but well below pre-war levels. Kpler estimates that only 21 cargoes managed to pass through the chokepoint last month, compared to the regular flow of three LNG cargoes per day during pre-war times.

Most LNG carriers are now utilizing a stealth approach to avoid detection while passing through Hormuz, making it difficult to accurately gauge flows and global supply balances. While Qatari and UAE cargoes have managed to transit the Strait in recent weeks, the volumes are insufficient to significantly impact the global LNG balance.

The reduced LNG flows from the Middle East over the past six months have driven gas prices in Asia and Europe to their highest levels since the 2022-2023 energy crisis, as buyers compete for the limited available supply that doesn't necessarily need to navigate the Strait of Hormuz.