Global LNG-Asian spot prices remain near four-month high as US-Iran conflict widens

Asian spot liquefied natural gas prices inched down this week but remained near its highest in four months after an attack on Egyptian gas facilities added to the ongoing uncertainty over Middle East shipping routes. The average price for September delivery into north-east Asia LNG-AS was estimated at **$21.35 per million British thermal units (mmBtu)**, down from **$22.00/mmBtu** last week, industry sources said. "North Asian spot prices are pushing near crisis highs again on the breakdown of ceasefire, yet again," said Toby Copson, managing partner at Davenport Energy. "Most players are managing with U.S. substitution rather than any meaningful Middle East supply. Some demand destruction is there but the price is being supported by lack of supply," he said. In Europe, a fall in Asian demand due to the higher price environment has led to stronger offers to Europe for uncommitted cargoes, said Martin Senior, head of LNG pricing at Argus. S&P Global Energy assessed its daily Northwest Europe LNG price benchmark for cargoes delivered in September on an ex-ship basis at **$19.557/mmBtu** on Thursday, a **$0.23/mmBtu** discount to the price at the Dutch TTF gas hub. Spark Commodities assessed the front-month price at **$19.495/mmBtu**, while Argus assessed it at **$19.530/mmBtu**. Energy markets are caught again in the crossfire of diplomacy and military confrontation as a weekend pause in hostilities was quickly replaced by tit-for-tat strikes between the U.S., Iran and Gulf neighbours, said Florence Schmit, senior energy strategist at Rabobank. "The prospects for a meaningful deal remain slim, while Strait of Hormuz energy traffic remains far from a return to normal," she added. A drone strike that damaged two gas tankers in Egyptian waters has "provided an additional layer of uncertainty, prompting market participants to reassess Egypt's near-term import requirements during the peak summer demand season," said Aly Blakeway, head of Atlantic LNG at S&P Global Energy. While reduced Egyptian re-gasification capacity could temporarily free up cargoes for Europe, Egypt could return aggressively to the market should import constraints ease, sustaining competition for Atlantic Basin supply, Blakeway said. Kpler has reduced its LNG import forecast for Egypt in August, reducing deliveries to 1.3 million metric tons from 1.3 million metric tonnes after the attack knocked the Damietta import terminal offline. "The incident comes at a crucial time for Egypt, as July and August are the country’s highest demand months, with scorching temperatures driving power demand to record levels," said Laura Page, manager of Kpler Insight for LNG and natural gas. "The ability for Egypt to meet peak demand in August will be severely impacted If a replacement FSRU cannot be organised quickly," she added. In LNG freight, Atlantic rates fell to **$78,250/day** and Pacific rates increased to **$75,500/day**, said Spark Commodities analyst Qasim Afghan. U.S. Gulf Coast prompt cargoes are currently priced at **$18.215/mmBtu** on July 30, he added. The U.S. front-month arbitrage to north-east Asia via the Cape of Good Hope is still firmly pointing to Europe, while the arbitrage via Panama is open and firmly pointing to Asia, Afghan said.

Global LNG-Asian spot prices remain near four-month high as US-Iran conflict widens

Asian spot LNG prices stay near four-month high

Europe sees stronger offers as Asian demand eases

Middle East disruptions keep supply risks elevated

Freight and arbitrage remain split between Europe and Asia

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