Europe's LNG demand, growing fleet size to pressure shipping rates in winter
UNG•Strong European LNG demand is expected to keep more cargoes within the Atlantic basin and cap shipping costs this winter, while new vessels add pressure. Atlantic freight rates fell to $25,750 a day from a March high of $287,500; more than 80 new vessels are expected annually from 2026 to 2028.
1. Freight rates fall
LNG freight rates in the Atlantic and Pacific have returned to pre-war levels as new vessels join the fleet and more US cargoes head to Europe rather than Asia, shortening voyages and improving vessel availability. Atlantic rates for a common 174,000-cubic-meter vessel were $25,750 a day on Tuesday, down from $287,500 in early March. Pacific rates were $39,000, compared with $225,750 in early March.
2. More ships expected
Around 55 new vessels were delivered in the first seven months of 2026, with another 40 to 45 expected by year-end. Analyst Pratiksha Negi said roughly 95 vessels are expected in 2027 and 80 in 2028, which could cap freight rates if LNG demand and ton-mile growth do not keep pace with supply.
3. Europe draws cargoes
European US imports picked up in August and September, drawing volumes away from Asia. Analyst Qasim Afghan said forward curves show Europe remains the most attractive destination for US cargoes through winter; in February and March 2027, Europe currently offers more than $3 per million British thermal units greater profitability than Asia. However, fourth-quarter pricing and volatility between Asian JKM and Dutch TTF gas prices could redirect cargoes and lift freight rates.
