LNG Traffic Through Hormuz Hits Highest Level Since Iran War Began

LNG traffic through the Strait of Hormuz surged to the highest level since the Iran War began in February, with 31 tankers exporting liquefied natural gas compared to 27 in September, according to Kpler data cited by Reuters. Notably, most of these cargoes originated from Qatar's Ras Laffan hub, despite the facility remaining under force majeure conditions.

In two instances, LNG loaded at Ras Laffan was subsequently transferred to other tankers after clearing the Strait of Hormuz. However, Qatar's total LNG exports are still far below pre-war levels; in February, the country reached nearly 6.2 million tons, while October saw a total of 2.7 million tons. In contrast, the UAE successfully restored its LNG exports to pre-war levels, as indicated by the data.

October loadings from the UAE's Das Island totaled seven, unchanged from the previous month. The Iranian attacks on U.S. allies in the Gulf crippled 17% of Qatar's export capacity, leading to an estimated $20 billion annual revenue loss, as reported by QatarEnergy in March. Since then, the company has been struggling to fulfill contracts amidst the force majeure situation.

In a surprising turn of events, Qatar has emerged as the largest buyer of U.S. liquefied gas, sealing two long-term deals with Cheniere Energy to purchase up to 4 million tons annually of LNG from Cheniere's Sabine Pass and Corpus Christi export facilities, with deliveries planned to commence in 2031 and continue through 2054. Despite the improvement in LNG flows from the Persian Gulf, Rystad Energy cautioned earlier this week that the Northern Hemisphere winter of 2023-2024 is likely to be highly uncertain in terms of energy security, with a high probability of significantly higher gas prices due to tight supply conditions.